Working for integrationthehda.co.za/pdf/uploads/multimedia/eMalahleni___Mpumalanga.pdf · 1. Frequently Used Acronyms 1 2. Introduction 2 3. Context 5 4. Context: Mining Sector Overview

Lesedi

AlbertLuthuli

Msukaligwa

LekwaDipaleseng

GovanMbeki

VictorKhanye

SteveTshwete

EmakhazeniThembisile

City ofTshwane

Emalahleni

Gert SibandeDistrict

Municipality

NkangalaDistrict

Municipality

SedibengDistrict

Municipality

EkurhuleniMetropolitanMunicipality

City of TshwaneMetropolitanMunicipality

Sources: Esri, USGS, NOA

Mpumalanga

N12

N4

Working for integration

Housing Market Overview

Human Settlements Mining Town Intervention

2008 – 2013

eMalahleni – Mpumalanga

The Housing Development Agency (HDA)Block A, Riviera Office Park,6 – 10 Riviera Road,Killarney, JohannesburgPO Box 3209, Houghton,South Africa 2041Tel: +27 11 544 1000Fax: +27 11 544 1006/7

DisclaimerReasonable care has been taken in the preparationof this report. The information contained hereinhas been derived from sources believed to beaccurate and reliable. The Housing DevelopmentAgency does not assume responsibility for anyerror, omission or opinion contained herein,including but not limited to any decisions madebased on the content of this report.

© The Housing Development Agency 2015

AcknowledgementsThe Centre for Affordable Housing Finance (CAHF) in Africa, www.housingfinanceafrica.org Coordinated by Karishma Busgeeth & Johan Minnie for the HDA

The Housing Development Agency | eMalahleni Mining Town Housing Market Report

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Contents

1. Frequently Used Acronyms 1

2. Introduction 2

3. Context 5

4. Context: Mining Sector Overview 6

5. Context: Housing 7

6. Context: Market Reports 8

7. Key Findings: Housing Market Overview 9

8. Housing Performance Profile 10

9. Market Size 16

10. Market Activity 21

11. Lending Activity 31

12. Leverage 36

13. Affordability Profile 39

14. Rental Index 43

15. Key Concepts 45

16. Source List 48

1. Frequently Used AcronymsCAHF – Centre for Affordable Housing Finance in Africa

GDP – Gross Domestic Product

GVA – Gross Value Added

HDA – Housing Development Agency

HPI – Housing Performance Index

IDP – Integrated Development Plan

NU – Non Urban, a Stats SA subplace designation

RDP – Reconstruction and Development Programme

SDF – Spatial Development Framework

SP – Subplace

StatsSA – Statistics South Africa


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2. Introduction

The Housing Development Agency (HDA) is a national public development agency that promotes sustainable communities by making well-located land and buildings available for the development of human settlements. As its primary activity, the HDA assembles and releases state, private and communal land and buildings for development. In addition, the HDA provides project delivery support services to organs of state at local, provincial and national levels. In setting the agenda and asserting its role in the housing continuum, the HDA realised that there is a gap in the provision of accurate and easy-to-understand information regarding the property market, particularly in previously overlooked areas, including the mining towns. The development of this report is a result of this gap. It aims to explore and present an overview of the formal housing markets in Matjhabeng, Moqhaka, Merafong, Randfontein, Westonaria, Thabazimbi, Greater Tubatse, Elias Motsoaledi, Lephalale, Fetakgomo, eMalahleni, City of Matlosana, Mogale City, Ephraim Mogale, Steve Tshwete, Thaba Chweu, Tsantsabane, Ga-Sekgonyana, Gamagara, Kgetlengrivier, Madibeng, Moses Kotane and Rustenburg so as to change perceptions of affordable markets, and as such, expand and deliver affordable housing options within South Africa’s municipalities. The study was undertaken over a three-month period, relying mainly on the high level indicators developed by the Centre for Affordable Housing Finance in Africa. These indicators consider the market conditions, existing market size and activity, average prices and values, market growth and lending activity in the area to support a better understanding of the opportunity and the impact of various housing policy interventions. The indicators also highlight the range of opportunities across areas to stimulate the affordable housing market in South African municipalities. The methodology also included site visits to eMalahleni, Randfontein, Westonaria, and Rustenburg so as to confirm findings and to gain more insights about the current housing circumstances. The report is intended for use by all stakeholders involved in planning, including professionals in municipalities, Government officials, private sector, investors, developers and urban planners, for the mission of enticing a range of development options. The report does not address housing supply for the lowest income levels, but rather seeks to make the case for expanding the gap market in order to entice private sector engagement more effectively.

2.1 Report Contents

The report covers the following aspects of housing markets through maps, charts and graphs to highlight understanding across the municipality and at the neighbourhood level, where housing markets function.

1. Housing Performance Profile – the pace of growth by suburb, on maps and in charts, as measured by the Housing Performance Index

2. Market Size – total number and distribution of residential properties, households, values and sales prices, key demographic indicators

3. Market Activity – properties, sales and new properties and resales over time

4. Lending Activity – sales and loans by lender

5. Affordability Profile – affordability based on local incomes, compared to sales price, housing gaps and affordability ratios

6. Leverage – the value of equity available for purchasing new homes

7. Rental Index – those areas most prime for quality, dense professionally managed rental housing

2.2 Definitions and Methodology

For housing supply, title and deeds records were merged at the suburb level, mapped and ranked through the Citymark dashboard. Priority has been placed on actual transaction datasets from familiar sources that can be geocoded to the subplace level, trended over time and updated regularly. For housing demand, StatsSA data was applied as the most consistently collected, widely understood and most common source of demographic data in the country.


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2.3 Benchmarks

Benchmarks are indicators used to compare performance across areas and are valuable for understanding meaning. Each indicator was created at the local, municipal and national levels in order to measure performance within and across markets. These benchmarks also highlight areas or trends which are outperforming the overall market in certain ways and might be most receptive to a variety of new housing development options.

2.4 Site Visits

As mentioned, the team conducted four site visits to eMalahleni, Randfontein, Westonaria, and Rustenburg. These visits provided the chance to confirm findings from the data and chat informally with residents about their current housing circumstances: where they had moved from; where they were currently living and how affordable it was; and where they were headed, including their ambitions and concerns. This helps to provide a sense of the housing continuum in the town – what choices residents feel empowered by, and what constraints keep them from realising their dreams and aspirations. Residents who were engaged came from informal settlements, brand new RDP homes, and a stalled RDP project, which had recently been reactivated by the city.

Some of the key insights from these site visits were:

• Residents may not know exactly what their home might be worth, but they are very aware that their home has a value, which includes stability and security for themselves and a better future for their families

• Many residents use their homes to supplement their own income, including renting shacks and rooms and operating home-based businesses

• There might be a relationship between how the houses are handed over and the sense of ownership (as evidenced by improvements to the homes)

• Everyone we spoke to understood the importance of a title deed, that the title deed proved (secured) ownership, even if, in a few cases, they were not sure of its status or how to get one

• Most people mentioned a better future for their children as an integral part of the importance of homeownership

• Residents were aware that there is an acute shortage of housing opportunities and that despite having their homes, they were surrounded by others without adequate housing

Many people understood housing markets around them intuitively — where the better houses were closer to jobs and transportation and what the barriers were — the price, the inconvenience and the cash required to access the houses.

2.5 Using this Report

This report is intended to provide a high-level view of the mining town housing markets overall and by neighbourhood, within areas of particular interest, by measuring and comparing housing market performance amongst each other and with the municipality. This report highlights connections and implications from the findings that are of significant interest to the HDA. The report does not seek to understand why things are, but offers general ideas based on experience with housing markets and new learning about mining town housing markets from these reports.


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The report findings emphasise opportunity as opposed to risk or failure. Opportunities are defined as conditions or indicators within areas, which can show:

• The ways in which areas or markets are behaving positively (such as growing more quickly), or showing strength (such as stability and consistency)

• The ways in which areas can be connected to common strategies that promote growth, investment or sustainability (such as proximity to transit or density)

• A more accurate picture of the real value of areas in ways that can leverage economic investment (such as equity, lending levels and new registrations)

• Better ways in which risk can be measured and accounted for (such as timing, scale, or location risk)

• A more comprehensive scope or scale of markets, to better estimate and project market intervention (such as property or population size, absorption rates, or patterns of behaviour)

• Ways to challenge and overcome those perceptions or assumptions that might stymie investment, or slow growth

This report is not intended to provide a complete final picture of market conditions or demographic circumstances. It does not reflect conditions in the informal market, nor general attitudes. It is not intended to be the last word on market potential, but is rather the first: how can current conditions present opportunities for better housing options, and improved market performance? Where are places that might be performing better in some ways, which might provide areas of opportunity, and how? The highest and best use of this report is to suggest new ways to support the growth of affordable housing in South African mining towns, by exploring and reconsidering areas for new investment, expanding existing investment, and promoting policies and programmes which can support and entice that development. It can also imply the impact of ongoing investment and programmes activities.

2.6 About Formal Housing Markets

This report relies on the South African deeds registry as the basis for analysing local housing markets. Thus, the report only measures the formal housing market, which can be defined as those residential properties which have been formally titled to a specific owner or group of owners. While this excludes a large part of the human housing condition in these towns, the advantage of focusing on the formal housing market is that it offers a better understanding of that part of the residential property market, which is most opportune for leverage and investment interventions in ways previously not understood.

Taking into consideration the housing backlog from StatsSA, informal settlements and human mobility, housing markets are quite fluid and difficult to measure. Understanding housing markets more completely is one advantage of the titling initiatives recommended by many housing policy and planning advocates across the country.


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3.1 Municipal and Regional Context

Key aspects of the city are shown here for contextual purposes and to give important insights to the market overall. These aspects are summarised from the municipality’s 2014 IDP, i.e. the latest published on the city’s website:

• “Mining in eMalahleni is the highest contributor to both its economic growth and job creation and the town has the largest concentration of power stations in the country”

• “eMalahleni is strategically located as a municipality and town gateway into the province for eight of the nine provinces of South Africa”

• “Its proximity to Johannesburg, Ekurhuleni and Tshwane, which jointly constituted the largest economy in the country, serve the municipality favourably”

• “eMalahleni is the most industrialised municipal area in Nkangala and its landscape features underground and opencast coalmines”

• “The southern areas of eMalahleni form part of the region referred to as the Energy Mecca of South Africa, due to its rich deposits of coal reserves and power stations such as Kendal, Matla, Duvha, Ga-Nala and Kusile”

3.2 Socio-Economic Profile:

The municipality’s current demographic information is drawn from the HDA Municipal Profiles and from the 2001 — 2011 Census Data:

• “eMalahleni has a population of 395,466”

• “There was a 4.3% population growth between 2001 — 2011”

• “In 2011, over 13% of the population was unemployed, and almost 57% of the economically active population earn no income”

• “The mining industry makes up the highest share of the GVA and employment market.”

• “There are 119,874 households in eMalahleni, with an average household size of 3.2 people”

• “77.2% live in formal dwellings”

• “66% of the households have flush toilets connected to a sewerage system, piped water inside the dwelling, weekly refuse removal and electricity for lighting”

3. Context


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4. Context: Mining Sector Overview

This brief industry profile is provided to help understand how the mining sector might affect and engage housing in the mining towns. The mining policies are not specific to the towns — that information is not available. This information has been included because of the mineral mined, the regional location, or specific city references (this report does not assess programme efficacy or impact).

The eMalahleni coalfield is situated in the Northern Karoo Basin, stretching from Springs in the west to Belfast in the east, and Middelburg in the north to Rietspruit in the south.

4.1 Mining Industry Profile

• Roughly 60% of South Africa’s coal deposits are located in eMalahleni and its surrounds. The majority of South Africa’s reserves and mines are in the Central Basin, which includes the eMalahleni, Highveld and Ermelo coalfields. There are more than 22 collieries in the eMalahleni District area, which are less than 40km apart in any direction

• Coal production in these mines has a 47 year projected lifespan; the Central Basin is likely to peak in the next decade

• The Mafube Colliery project produces 1.1 million tonnes of coal per year for supply to the Arnot Power Station, close to eMalahleni, making it worth ZAR 16 billion over its lifespan

• The New Largo Project, the South African coal industry’s second largest operation, is geared to produce around 15 million tonnes of coal per year, for supply to the Kusile Power Station, roughly 25km from eMalahleni and valued at around ZAR 11 billion

• Most of the coal mines are opencast mines, there are some shaft mines and on the whole coal mines are less labour intensive than gold or platinum mines

4.2 Housing in the Mining Sector

Due to the remote locations of many mining operations, mining companies have long histories of providing housing solutions for its employees, from executive management to miners. Different approaches to housing policies vary and are not discussed in specific terms. Knowing the general Mine Housing Policies assists in understanding the effects on the housing markets in their entirety in the towns. Unlike large metropolitan areas where housing markets grew more organically (with some historical master planning involved), these towns were largely designed intentionally to serve the interests of the mining franchises above them. The following is only indicative of each company’s general approach, the housing models in each town are approached differently and more specific to their context. Essentially, understanding the housing options offered by the mining companies is an important factor in understanding local housing markets.

• eMalahleni’s primary extractive is coal. Over 80% of South Africa’s saleable coal is produced by five prominent coal mining companies, namely: BHP Billiton’s Energy Coal South Africa (BECSA); Anglo American Thermal Coal; Xstrata Coal; Exxaro Resources and Sasol Mining, four of which function predominantly in eMalahleni. Their Mine Housing Policies outline the following:

• “Anglo American committed more than R2 billion to facilitate home ownership and achieve the Mining Charter target of ‘one person per room’ through 2014”

• “Anglo American currently offers a number of different housing options, ranging from housing allowances to houses built for employees”

• “Xstrata has eliminated hostels and unsustainable “mine villages”

• “XCSA pays industry leading “living-out allowances” (about R2000 per month) intended to offer employees with flexible housing options throughout the area”

• “XCSA educate all employees during annual induction training on how to access formal housing and the merits thereof as opposed to informal housing”

• “Exxaro has introduced a five-year mortgage repayment subsidy for first-time homebuyers who are permanent employees”

• “Exxaro has approved a Housing Capital Assistance Scheme that was piloted at Arnot, outside eMalahleni. This will assist first-time homeowners on specific salary grades with a capital amount of R75 000 after tax”

• “While Exxaro’s housing policy focuses on home ownership, employees receive a housing or living-out allowance to assist them in obtaining accommodation. The total value of these allowances in 2010 was over R137 million”

• “Exxaro facilitated employee ownership of 10,510 homes in 2010”


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5. Context: Housing

The municipality has identified the following challenges and opportunities from its 2014/2015 IDP:

5.1 Housing Challenges:

• “The municipality has 69 informal settlements, the highest number in the Province”

• “Limited land available for housing development”

• “Continuous land invasions”

• “Inadequate allocation of houses, coupled with a slow pace in housing delivery, thus negatively impacting the housing backlog”

• “Unavailability of adequate services like water and sewage in areas earmarked for housing development (e.g. informal settlements in the process of being formalised)”

5.2 Housing Strategies:

• “Formalise all informal settlements and existing backyard shacks, in-situ, in order to cater to the high demand for backyard rental facilities, so as to enhance the long term sustainability of backyard dwellings”

• “Provide for multiple family accommodation through new subsidised housing projects, or institutionalised housing and conversion of hostels into family units and ‘community residential units”

• “The incorporation of families evicted from farms into formal residential areas and promotion of medium to high density in-fill development (“Gap Market”)”

• “Land development for integrated residential development programme”

• “Establishment of a reception area in support of the Informal Settlement Upgrade Programme”

• “Identify suitable land for housing development”


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6.1 Report Coverage

It is important to keep in mind that these reports only cover the formal housing market, as captured by the Deeds Registry. Thus, there are four layers of information in the report:

1. Total StatsSA suburbs

2. Suburbs with residential properties

3. Suburbs with residential properties sold

4. Suburbs with residential properties sold with a bond

This map shows all the census suburbs in the town (pink) to all the suburbs with residential properties with bonded sales (dark red). The chart shows what percentage of the town has a formal residential housing market. This may help explain some of the maps, and why some suburbs are included and some may be omitted. For example, information on bonded sales will only reference suburbs in which bonded sales took place.

6. Context: Market Reports

Market Area By The Numbers

Suburbs 99

Suburbs with residential properties 66

Households 119 863

Residential properties 53 454

Housing backlog 23 954

Backlog as percent of all properties 45%

Households to properties ratio 2.24

Average monthly income R13 300

Total residential value R32 billion

Average property value R603 000

Average sales price R689 000

Source: Centre for Affordable Housing Finance in Africa, Lightstone, StatsSA

eMalahleni Housing Report Coverage

Total Census Subplaces (SPs) 99

Total SPs with registered residential properties

67 68%

Total SPs with sales 58 59%

Total SPs with bonded sales 57 58%

Greenside Colliery SP

Matla Power Station

Khutala Colliery

Frischgewaagd

Thubelihle SP

Sharrighuisen

Rethabile SP

Ga-Nala SP

Vandyksdrif

Bankfontein

Clewer SP

Wilge SP

HDA Mining Town reports market coverageeMalahleni, Data by suburb of census and formal deeds registry data, 2013

1 4

Data coverage

Source: Stats SA Census, 2011, South African Deeds Registry via Lightstone (Pty) Ltd, 2015.


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7. Key Findings: Housing Market Overview

eMalahleni’s housing market has stabilised after a drop, which lasted a few years. The stabilisation may be attributed to stable incomes, new housing investment and in particular, a thriving sectional title market. This is likely due to continued growth and expansion of the coal sector and jobs along the corridor, and the increasing urbanisation of previously undeveloped areas within the municipality. Recent growth has slowed a bit, creating an opportunity for markets to be carefully assessed in order to best position the next wave of growth. Housing options are diversely distributed across the municipality.

eMalahleni’s affordability ratio is 1.97, which is below the mining town average of 2.8, meaning it takes almost twice the average income to afford the average property sales price in eMalahleni. This may prioritise housing strategies and solutions, which propose creative financing tools and techniques to reduce financial barriers (such as down payments, interest rates and principal requirements) as well as unlocking equity, rather than simply trying to push costs down.

The presence of older RDP units within the municipality represent an important opportunity to leverage that investment in affordable housing in the years ahead, as owners seek to sell and move up the housing continuum, if opportunities are positioned properly. Average equity in these areas doubles purchasing power, putting moderately priced housing within reach of lower income families. This situation can be used to drive developers to build more gap housing, and financiers to finance RDP acquisition loans.

The area has an above-average diversity and integration of housing values and property types, despite some clustering, which suggests a market that is ready to meet a wide range of needs and expectations. Formal mixed-income housing options, which offer much-needed internal cross subsidisation to keep prices affordable, will likely do very well and bodes well for a market less reliant on Government and mining intervention.

eMalahleni has experienced a significant increase in non-traditional lenders, most predominantly Eskom-related finance companies, which account for almost one-third of all lending in the municipality in 2013, and almost all of the lending growth. With the presence of hundreds of RDP units, it will be an important strategy to encourage traditional lenders to develop creative loan programmes targeting those homeowners in order to unlock the value of those homes, and allow owners to move up the housing continuum.

The opportunity for rental housing development within eMalahleni is strong within specific areas. Those areas with greater density, modest incomes, and affordability challenges are more likely to support quality, professionally managed and affordable rental housing. Rental housing also provides flexibility to employers and workers as mining markets expand and contract from time to time.


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8. Housing Performance Profile

8.1 Key Findings: Housing Performance Index

The eMalahleni housing market has stabilised, after a recent drop, due to stable incomes, new housing investment and in particular, a thriving sectional title market. This is also likely due to continued growth and expansion of the coal sector and jobs along the corridor, and the increasing urbanisation of previously undeveloped areas within the municipality. This creates an opportunity for markets to be carefully assessed in order to best position the next wave of growth. Housing options are not currently diversely distributed across the municipality. The volume of market growth in eMalahleni is also within the top five highest of the municipal profiles.

8.2 Policy Implications

With an estimated housing backlog equal to almost half of all registered residential properties in eMalahleni, meeting housing demand will be a crucial factor in continuing to stabilise the town through this period of growth. In slow-growth neighbourhoods, where most of the lower priced housing currently exists, housing will need to be built more affordably, but will need to be situated well to better integrate housing markets. Site development initiatives should include rental housing to meet the increased demand.

8.3 Quick Definitions:

Housing Performance Index (HPI): provides an understanding of local housing market performance by tracking six key indicators which most effectively convey fundamental components of real estate markets and then comparing them to the results for the entire municipal property market to determine areas of growth or strength relative to the entire municipality.

Housing Performance Profile: this describes housing market performance of local areas as growing (those areas where the index is 6.5 or higher), stable (the index is 4 or higher) or slow (the index is less than 4) compared to the municipality in which it is located.

Formal Housing Market: residential properties that are registered on the South African deeds registry. This does not include informal settlements or other houses otherwise not on the deeds registry.

Indicators: suburb-level measures used to convey a more complete understanding of housing markets, sometimes a point of data (such as number of properties), or a calculated factor (such as the housing index or the affordability ratio).

Housing Continuum: a range of housing options which are available to a wide range of income levels, budgets, housing types and ownership opportunities.

Bonded Sales: the total residential properties that were transacted with a bond collateralised or secured by that property.

New Registrations: residential properties that have never appeared on the deeds registry before. This is an important indicator of the growth of a market, whether the property has just been built or was built previously and never registered.

Churn: an indicator of the sales activity within an area similar to turnover, it is the number of residential sales divided by the total number of properties.


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8.4 The Housing Performance Index

These maps below identify the Housing Performance Profile by suburb (top) and total residential properties (bottom), to provide a sense of how local property markets are performing compared to the municipality as a whole. The Housing Performance Index (HPI) provides a glimpse of the formal housing market only, and does not include any demographic information. The weights were determined by how well the indicator reflects activity, increased investment and demand (and how reliably the indicator can be measured).

This information is useful in understanding how the formal market is behaving (which is influenced by the presence of mines, informal settlements and the people who move in and around the towns). This picture is intended to help understand how key housing sector partners (developers or investors) seek and measure opportunity in order to better inform and coordinate Government planning processes and private sector motivation.

“Growing” suburbs are areas which exceed the municipality’s rate of change in any four of six key market indicators. “Stable” areas meet or beat the municipality in at least three indicators, and “Slow” areas are growing at rates less than the municipality in two (or fewer) of the six indicators. While an index provides quick understanding, it is important to look more closely at the indicators themselves to understand more clearly the underlying factors affecting market growth and stability.

CAHF Housing Performance Index

Indicator Measured Implies Weight

Price Average sales price

Appreciation 25%

Value Average property value

Appreciation 25%

Transac-tions

Number of sales

Demand 15%

Percent bonded

Bonds per sales

Investment 15%

Churn Repeat sales as a percent of total properties

Activity 10%

New properties

New properties added to the registry

Growth 10%

Wilge SP

Valley Glen

Pine Ridge

Phola SPNew Stand

Hlalanikahle SP

Highveld Park

Dixon AH

Bankenveld Estate

Thushanang

Thubelihle SP

Tasbet Park Ext 3

Schoongesicht

Ogies SP

Lehlaka Park

KwaGuqa Ext 14

KwaGuqa Ext 10

Jackaroo AH

Heuwelfontein SH

Ga-Nala SP

Ferrobank SP

eMalahleni NU

Duvha Park

Del Judor Ext 4

Clewer SP

Housing Performance IndexeMalahleni, 2013Market growth profile by suburb, with property volume

Total Residential properties

0

1 000

2 000

≥ 3 000

Housing Performance Profile

Growing

Stable

Slow

Null

Source: Centre for Affordable Housing Finance in Africa, 2015. All indicators reflect formal market data as reflected on thedeeds registry.

KwaThomasMahlanguville

Heuwelfontein SH

Tasbet Park Ext 3

KwaGuqa Ext 10

Del Judor Ext 4

eMalahleni NU

Highveld Park

Thubelihle SP

Jackaroo AHValley Glen

Pine Ridge

Clewer SP

Ogies SP

Dixon AH

Phola SP

Housing Performance IndexeMalahleni, 2013Market growth of six key housing market indicators, compared to the metro

Housing Performance Profile

Growing

Stable

Slow

Null

Source: Centre for Affordable Housing Finance in Africa, 2015. All indicators reflect formal market data as re-flected on the deeds registry.


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BankenveldEstate

Ben Fleur

Buffer Zone

Clewer SP

Dark City

Del Judor Ext4

Die Heuwel

Dixon AH

DoornpoortSH

Duvha Park

Emaforumini

eMalahleniCentral

eMalahleniExt 8

eMalahleniExt 10

eMalahleniExt 16

eMalahleniExt 41

eMalahleni NU

Emavaga

Emsagweni

Ferrobank SP

Fransville

Ga-Nala SP

HeuwelfonteinSH

Highveld Park

3,52,5

6,5

5,01,01,0

2,54,0

4,0 5,5

1,0

1,5

2,52,52,52,52,5

2,5

5,0

5,58,0

2,5

6,5

4,0

4,0

5,5

2,52,5

6,56,5

6,0

2,0

2,5

1,01,01,0

3,0 0,02,5

4,05,0

5,0

6,57,0

3,5

7,58,5

4,5

3,53,5

2,0

4,5

5,0

3,50,0

4,04,04,0

1,0

5,0

2,52,52,52,5

4,0

4,5 5,05,0

1,0

1,0

6,5

2,5

3,53,5

1,01,0

4,0

3,53,5

6,04,0

2,52,5

2,5

3,53,5

6,5

0,01,0

1,01,01,0

5,0

0,0

4,0

5,04,5

2,52,52,52,52,5

2,5

2,50,00,00,00,00,0

2,50,0

2,52,5

0,00,0

3,5

7,5

4,02,5 1,01,0

3,5

0,0

2,54,04,0

5,5

3,02,5

8,0

4,0

0,00,0

Housing Performance Index TrendseMalahleni, performance over time relative to the metro, 2007 -2013

HlalanikahleExt 1

HlalanikahleExt 2

HlalanikahleExt 3

HlalanikahleSP

Jackaroo AH

Jackaroo Park

Klarinet

KwaGuqa Ext4

KwaGuqa Ext5

KwaGuqa Ext10

KwaGuqa Ext14

KwaGuqa Ext18

KwaThomas..

Lehlaka Park

Lynnville

Model Park

New Largo SP

New Stand

Ogies SP

Oyco

Paxton SP

Phola SP

Pine Ridge

Reno Ridge

River View

5,0

0,00,00,00,0 2,5

1,52,5

2,5

0,00,00,0

2,50,00,00,00,00,0

6,5

4,0

2,52,52,52,5

5,03,5

3,5

1,0

7,5

6,5

4,0

5,0

2,5

6,5

2,5

6,5

3,5

5,06,0 5,5

2,52,5

0,04,0

4,0

2,5

5,0 5,5

1,5

5,05,05,0 5,5

2,5

2,52,52,5 0,0

5,05,0

0,0 2,52,5

5,05,0

5,5

5,05,0

1,5

8,0 6,5

2,5

2,54,0

4,00,00,0

5,0

5,0

4,02,5

6,56,5

3,0

3,53,5

9,0

2,02,0

1,0

2,52,52,52,52,5

2,5

4,04,0

5,09,0

3,00,0

4,0

5,05,0

5,05,0

5,5

3,5

3,0

8,0

5,01,5

0,0

2,53,5

3,54,5

1,01,0

5,0

4,54,5

2,0

8,0 7,5

6,56,5


13

8.5 Performance Over Time

These charts provide the Housing Performance Index by suburb over time using the six key indicators (price and value appreciation, sales and bonded sales, churn and new properties). Growth is relative to the municipality’s rate of change from the preceding year, so it is important to compare these lines to the area’s overall performance, and the direction in which the trends are headed.

While most areas are experiencing very steady growth, many areas appeared to have grown in 2013 compared to the prior year. In considering development investment over the long term, stability of growth is often a more important consideration when projecting future performance than high growth. Notably, lower cost suburbs are more impacted by investment and thus their performance often outpaces the municipality, whether the growth is stimulated by Government or private sector investment. This information can help advise how to create a more cohesive and stable housing continuum, with fewer spikes and drops, and where to begin.

Areas with no data have no residential properties or sales transactions, such as farms or open space, mines or industrial uses like power generation.

2008 2009 2010 2011 2012 2013

Schoongesic..

Seekoei SH

Siyabonga

SkoongesigSP

Springvalley

Tasbet Park

Tasbet ParkExt 1

Tasbet ParkExt 2

Tasbet ParkExt 3

Thubelihle SP

Thushanang

Tycoon

Valley Glen

Vezibuhle

Vosman Ext17

Vosman SP

Wilge SP

Witbank DamResort

2,0

5,0

0,04,0

6,56,5

8,0

0,00,00,0

0,0

2,52,5

4,0

5,0

0,00,0

6,56,5

3,0

3,0

2,50,0

3,5

5,0

3,5

9,0

4,01,01,0

0,0

4,0 3,5

3,0

0,0

6,56,5

4,0

6,55,0

2,52,5

2,5

2,52,52,5

6,5

0,0

5,0

4,0

5,06,5

5,5

2,52,5

4,0

9,0

2,5

6,0

1,01,0

2,50,00,00,00,00,0

2,5

2,52,52,5

5,0

0,0

2,51,00,00,00,0

0,0

5,05,0

5,5

9,0

2,52,5

Growth ProfileGrowingStableSlowNull

Source: Centre for Affordable Housing Finance in Africa, 2015. All indicators reflect formal market data as reflected on thedeeds registry.

2008 2009 2010 2011 2012 2013

Year

Emalahleni

5,0 4,5

Housing Performance Index Trend eMalahleni, 2008 - 2013.

Source: South African Deeds Registry via Lightstone (Pty) Ltd, 2015. All indicators reflect formal market data as reflected on the deeds reg-


14

8.6 Housing Performance Indicators

Six indicators – price and value appreciation (top orange and blue lines), total sales and bonded sales (middle green bars and brown line), change in new properties and churn (bottom red and blue lines) – are the most telling of growing, active housing property markets. The relationship between indicators provides clues as to what may be driving performance, what that might mean for future development potential and how it might affect or be influenced by different housing types, prices or target incomes.

These charts compare the performance of three ownership types, namely freehold, sectional title and estate ownership. The market appears to be slowing down, consistent with most markets across the country. Perhaps due to rising average sales prices, the number of sales has dropped slightly but steadily, as have bonded sales, from 80% of all sales in 2011 (brown line) to 72% in 2013.

Housing markets are very sensitive to access to credit, so lending information will be helpful in understanding this more closely (see Lending below). Churn rates have steadily dropped (blue line), indicating slower turnover of existing homes over time as well, except for sectional title properties. New registrations (red line) have spiked in 2010 and 2012, reflecting increases in sales (green bars) in both years.

2008 2009 2010 2011 2012 2013

Em

ala

hle

ni

R 0K

R 200K

R 400K

R 600K

Avg

Pro

pert

y V

alu

e (

blu

e)

0K

1K

2K

3K

To

tal

Resid

en

tial

Sale

s( g

reen

)

0%

1%

2%

3%

4%

Ch

an

ge i

n N

ew

Pro

pert

ies

(red

)

R 0K

R 200K

R 400K

R 600K

Avg

Sale

Pri

ce (

ora

ng

e)

0K

1K

2K

3K

To

tal

Bo

nd

ed

Resid

en

tial

Sale

s (

bro

wn

)

0%

1%

2%

3%

4%C

hu

rn (

blu

e)

R 454K

R 603KR 459K

R 689K

1 915 1 9172 064 2 140

3 082

2 08282%

78%76% 80% 73%72%

1,5%

2,4%

1,7%

1,1%1,1%0,8%

3,0%2,9%

4,2%

2,7%2,6%2,4%

Key Performance IndicatorseMalahleni, 2008 - 2013Change over time of the six key indicators within the Housing Performance

Index

Key Indicators

Avg Property value

Avg Sales Price

Total Residential Sales

Total Bonded Residential Sales

Change in New Properties

Churn

Source: SA Deeds Registry from Lightstone. All indicators reflect formal mar-

ket data as reflected on the deeds registry.

2008 2009 2010 2011 2012 2013

Em

ala

hle

ni

R 0K

R 200K

R 400K

R 600K

Avg

Pro

pert

y V

alu

e (

blu

e)

0

500

1 000

1 500

2 000

To

tal

Resid

en

tial

Sale

s

0%

1%

2%

3%

Ch

an

ge i

n N

ew

Pro

pert

ies

( red

)

R 0K

R 200K

R 400K

R 600K

Avg

Sale

Pri

ce (

ora

ng

e)

0

500

1 000

1 500

2 000

To

tal

Bo

nd

ed

Resid

en

tial

Sale

s

0%

1%

2%

3%

Ch

urn

(b

lue)

R 419K

R 552KR 421K

R 672K

1 569

1 208

2 103

1 4501 5641 502

82%77%

80%

71%74%

70%

1,0%1,2%

0,8%1,0%

0,7% 0,7%

2,5% 2,4%2,4%

3,2%

2,2%2,1%

Key Performance IndicatorseMalahleni, Freehold properties, 2008 - 2013Change over time of the six key indicators within the Housing Perfor-

mance Index

Key Indicators

Avg Property value

Avg Sales Price




Churn

Source: SA Deeds Registry from Lightstone. All indicators reflect formal

market data as reflected on the deeds registry.


15

8.7 Housing Performance Indicators by Property Type

Different housing markets perform in different ways, including freehold (free-standing) homes and sectional title (subunits within a single property). The area is predominantly freehold (see Market Size below), yet sectional title market activity is growing significantly in terms of sales transactions, lending and rates of new properties added to the registry (red line).

Since 2010, the percent of bonded sectional title sales have rapidly outpaced freehold sales, which stimulated market growth. Bonds associated with sectional title units in the past two years (85% and 81%) are 10% higher than any other property type. Lending commitments are instrumental in the growth of housing markets, and the ability to access bonds to buy sectional title houses, which has helped to drive the growth of this housing type. Sectional title ownership can often be an important affordable homeownership option.

Sectional title properties have also experienced a tremendous growth in churn, or turnover rates (blue lines), suggesting a robust market in the sale of existing sectional title properties. While sales volumes are one-third less than freehold properties, the number of sectional title sales doubled in 2012 from 2011, and almost doubled again in 2013. Estate properties are experiencing the greatest drop in sales activity (green bars, bottom chart), and average sales prices (orange line) are trending significantly below property values (blue line).

2008 2009 2010 2011 2012 2013

Em

ala

hle

ni

R 0K

R 200K

R 400K

R 600K

Avg

Pro

pert

y V

alu

e (

blu

e)

0

100

200

300

400

To

tal

Resid

en

tial

Sale

s

0%

5%

10%

15%

Ch

an

ge i

n N

ew

Pro

pert

ies

(red

)

R 0K

R 200K

R 400K

R 600K

Avg

Sale

Pri

ce (

ora

ng

e)

0

100

200

300

400

To

tal

Bo

nd

ed

Resid

en

tial

Sale

s

0%

5%

10%

15%

Ch

urn

(b

lue)

R 511K

R 659KR 528K

R 710K

355

219

286

103137

99

85%

80%

81%

84%

86%

74%

9,1%8,2%

0,5%

17,2%17,1%

2,1%

12,9%

7,3%

5,8%5,6%5,2%4,4%

Key Performance IndicatorseMalahleni, Sectional Title properties, 2008 - 2013Change over time of the six key indicators within the Housing Perfor-

mance Index

Key Indicators

Avg Property value

Avg Sales Price




Churn



2008 2009 2010 2011 2012 2013

Em

ala

hle

ni

R 0K

R 500K

R 1 000K

Avg

Pro

pert

y V

alu

e (

blu

e)

0

200

400

600

To

tal

Resid

en

tial

Sale

s

0%

5%

10%

15%

Ch

an

ge i

n N

ew

Pro

pert

ies

(red

)

R 0K

R 500K

R 1 000K

Avg

Sale

Pri

ce (

ora

ng

e)

0

200

400

600

To

tal

Bo

nd

ed

Resid

en

tial

Sale

s

0%

5%

10%

15%

Ch

urn

(b

lue)

R 912K

R 1 186K

R 544KR 726K

459

299

693

366

434

354

82%

87%

81%

75% 72%75%

14,3%

2,9%2,0% 1,6%1,5%

9,1%

7,5%

12,6%

8,3%

6,6%5,5%

4,9%

Key Performance IndicatorseMalahleni, Estate properties, 2008 - 2013Change over time of the six key indicators within the Housing Perfor-

mance Index

Key Indicators

Avg Property value

Avg Sales Price




Churn




16

9. Market Size

9.1 Market Size: Key Findings

eMalahleni’s housing market is essentially three markets: Government-sponsored housing built as part of the National Housing Initiative over the past 20 years, privately traded and financed homes, and informal settlements. Although markets are diverse by value segments, they also appear to be slightly segregated geographically, i.e. between higher-priced, actively selling private growing markets near the city centre, and further flung lower income, non-bonded Government-sponsored developments and informal settlements (not on the deeds registry). eMalahleni has the second highest percentage of bonded sales of the investigated mining towns.

The need for housing is high. The current estimated housing backlog represents about 45% of the town’s current total formal residential properties. Demand creates opportunities for new housing supply to be positioned between the existing segregated markets to better integrate the town’s spatial, income, and housing markets.


Existing Government investment in housing can be leveraged to guide new development opportunities, if and when those homes can be sold to new buyers and the proceeds used to purchase new housing further up the housing continuum. For example, Government might prioritise new development between Government-dominated and private markets for more integration mixed-income sites, and fills spatial gaps within the town. Government can use this existing investment to identify areas of future development and entice private sector participation.

Encouraging the expansion of financing to lower income families will allow for those homes to be sold, and the proceeds used to support housing development further up the housing continuum.

Rapidly changing housing demand driven by mining activities makes a strong case for the prioritisation of quality rental housing. If rental housing is well-situated and convenient to transport and centrally located in dense areas, it can bring social and economic cohesion to housing markets over the longer term.


Market Size: the total number and distribution of important aspects of areas, including average home prices; home values; total households in order to inform the potential scale of housing intervention strategies and the impact of proposed development schemes.

Property Value Segment: in order to better understand the performance of housing markets, data has been grouped into four property value bands: properties valued under R250 000; between R250 000 and R500 000;between R500 000 and R1.2 million and over R1.2 million. This helps one to understand the various trends and strengths inherent in each segment, and to see how properties are integrating across the housing continuum, especially over time.

Government-sponsored Housing: housing which was created through some Government intervention, from site and infrastructure provision, direct construction or finance, such as Site & Service, RDP and BNG. While these homes are not recorded as such on the deeds registry, their presence is estimated based on surrounding registrations, timing, prices, and volume of activity.

Freehold / Full Title: a permanent and absolute tenure of land or property by a person or entity (such as a corporation or trust) with freedom to dispose of it at will. Freehold or full title describes the assumption of full ownership rights when one owns a property, often including the building and the land it is built on.

Sectional Title: separate ownership of units or sections within a complex or development. These are often comprised of mini subtype houses, semi-detached houses, townhouses, flats or apartments and duet houses. These are governed by the Sectional Titles Act and managed by a body corporate comprised of elected representatives of the sectional title owners in the development.

Absorption: the pace with which homes to be developed might be sold in a specific market during a given period of time. This can be calculated by dividing the total number of available homes coming on line by the estimated number of sales per month, often based on the rate of sales nearby.

Households to Properties Ratio: the total number of households (as reported by the census) divided by the total number of residential properties on the deeds registry. This is a quick, easy relative indicator of household density and formality of a suburb as compared to other areas.


17

9.4 Market Size and Government Investment in Housing

Market size measures the distribution of home prices, households and values in order to inform the potential scale of housing intervention strategies, and the impact of proposed developments on the surrounding area. It can also reveal the impact of Government investment in housing markets. Comparing the distribution of values to the housing performance map, several moderate income areas are growing faster than the municipality. In eMalahleni, properties with lower values are concentrated in the west, along transit corridors and near government investment in housing (map two). It is important that so many Government-sponsored housing units are on the deeds registry. However often these homes are undervalued for two reasons. The subsidy value was often noted as the sales price (rather than the cost), or sales prices are driven low because buyers lack access to credit with which to purchase the homes at a more realistic sales price, and pay with the cash they have.

Encouraging the resale of Government-sponsored housing is an important means of expanding housing options – for the sellers, who can move up the ladder with the equity from the sale of their property, to the first time homebuyer purchasing the existing home. More activity in these markets will also raise the value of the home, often a family’s most valuable asset.

Pine RidgeHlalanikahle Ext 3

Hlalanikahle Ext 1

Highveld Park

Jackaroo Park

eMalahleni Ext 8

Tasbet Park Ext 2

Tasbet Park Ext 3

Phola SP

New Stand

Dark City


Bankenveld Estate

Heuwelfontein SH

eMalahleni NU

New Largo SP

Thubelihle SP

Lehlaka Park

Emaforumini

Ga-Nala SP

Duvha Park

Clewer SP

Ogies SP

Klarinet

Distribution of Properties and Values by SuburbeMalahleni, 2013Formal residential properties, informal settlements and mines, by suburb

Number of Residential properties

0

5 000

10 000

15 000

Affordability

Under R250k

Between R250k - R500k

Between R500k - R1.2m

Over R1.2m

Type

Informal Settlement

Mines

Source: South African deeds registry via Lightstone (Pty), Ltd; Housing Development Agency informal

settlements and mines.

Hlalanikahle SP

KwaGuqa Ext 10

Tasbet Park Ext 1

Pine Ridge

Phola SP

New Largo SP

Hlalanikahle SP Ferrobank SP

Dark City

Buf fer Zone

Wilge SP

Vosman Ext 17

Valley Glen

Thushanang

Thubelihle SP

Seekoei SH

Schoongesicht

Reno Ridge

Ogies SP

Lehlaka Park

Klarinet

Jackaroo Park

Jackaroo AH

Heuwelfontein SH

Ga-Nala SP

Emavaga

eMalahleni NU

eMalahleni Ext 8

Number and Percent Government Sponsored Residential Properties, by total residential properties per suburb, 2013

0% 75%

% Govt SponsoredTotal Residential properties

0

1 000

2 000

≥ 3 000

Source: South African Deeds Registry via Lightstone (Pty) Ltd. All indicators reflect formal market data as reflected on the deeds registry.


18

9.5 Market Size by Value Segment

These charts provide the proportion of properties within each suburb by property value segment (below R250 000; between R250 000 - R500 000 and over R500 000). eMalahleni has a wide range of property values throughout the municipality, although they are clustered together, with very few suburbs hosting only one range of housing values. This may help to explain the area’s stable market and lack of sensitivity to changes in prices, financing or income changes. This makes it a good model for understanding the impact of a broad range of well-located, affordable housing.

Considering the coal sectors’ diverse approach to housing options for its employees, this may help to expand the diversity of housing types and values across town.

0 200 400 600 800 1000 1200 1400 1600 1800 2000 2200 2400 2600 2800 3000 3200 3400

Total Residential Properties

Reno Ridge

Ga-Nala SP


Del Judor Ext 4

Highveld Park

Lynnville

KwaGuqa Ext 18

Klarinet

Hlalanikahle Ext 1

KwaGuqa Ext 14

Vosman SP

KwaGuqa Ext 10

Model Park

Ben Fleur

eMalahleni Ext 41

Dixon AH

KwaGuqa Ext 4

Hlalanikahle SP

Vosman Ext 17

eMalahleni Central

Duvha Park

New Stand

Phola SP

Hlalanikahle Ext 2

KwaGuqa Ext 5

eMalahleni Ext 8

Tasbet Park Ext 2

Tasbet Park Ext 1

Die Heuwel

Lehlaka Park

Emaforumini

eMalahleni NU

eMalahleni Ext 10

Jackaroo Park

Thushanang

Emavaga

Schoongesicht

Tasbet Park Ext 3

Clewer SP

Thubelihle SP

Fransville

Pine Ridge

River View

Bankenveld Estate

Valley Glen

Buffer Zone

Tycoon

Dark City

eMalahleni Ext 16

Doornpoort SH

Ogies SP

Wilge SP

Seekoei SH

Tasbet Park

Hlalanikahle Ext 3

Ferrobank SP

Vezibuhle

Emsagweni

Paxton SP

Jackaroo AH

Witbank Dam Resort

Skoongesig SP

Heuwelfontein SH

New Largo SP

Siyabonga

Oyco

2 597687

2 797

1 381713 768

1 430 1 052 149

1 829 165

767232 821

765218 832

1 524

1 542

953531

658818

856 609

814559

518 831

1 315

1 002 217

327922

475 687

870231

29469989

116949

1 049

165853

1 008

938

830 95

851

759 70

625143

346198 151

274 397

390282

144 425 65

593

215 348

519

113259 96

446

313 8351

119299

349 80

369

381

387

360

374

227141

263

176

180

103

114

3

2

0

0

0

0

0

0

Market Size: Total Properties by Property Value SegmenteMalahleni, 2013Sorted by suburb, by property value

Property Value Segment

Under R250k


Between R500k - R1.2M

Over R1.2M

Source: SA Deeds data, via Lightstone (pty) Ltd, 2015. All indicators reflect formal market data as reflected on the deeds registry.


19

9.6 Market Size by Property Type

While eMalahleni’s residential properties are predominantly freehold, the growth of sectional title ownership is an important foothold to affordability. It appears that most sectional title properties are clustered in the central part of town, along the major transit routes to Pretoria (route leading west) and Johannesburg (route leading southwest), making it convenient for individuals and small families who work in those cities, yet need affordable housing options.

Reno Ridge

Ga-Nala SP


Del Judor Ext 4

Highveld Park

Lynnville

KwaGuqa Ext 18

Klarinet

Hlalanikahle Ext 1

KwaGuqa Ext 14

Vosman SP

KwaGuqa Ext 10

Model Park

Ben Fleur

eMalahleni Ext 41

Dixon AH

KwaGuqa Ext 4

Hlalanikahle SP

Vosman Ext 17

eMalahleni Central

Duvha Park

New Stand

Phola SP

Hlalanikahle Ext 2

KwaGuqa Ext 5

eMalahleni Ext 8

Tasbet Park Ext 2

Tasbet Park Ext 1

Die Heuwel

Lehlaka Park

Emaforumini

eMalahleni NU

eMalahleni Ext 10

Jackaroo Park

Thushanang

Emavaga

Schoongesicht

Tasbet Park Ext 3

Clewer SP

Thubelihle SP

Fransville

Pine Ridge

River View

Bankenveld Estate

Valley Glen

186 1 544 1 633

83 2 793

2 862

498 584 1 559

140 1 854

1 820

1 815

1 567

1 542

25 1 516

1 476

1 469

8592 1 196

79 373 898

8073 1 196

65 1 142

1 259

1 162

1 101

416 671

116 958

1 052

1 031

1 010

987

645 912

38 802

72 759

118 633

695

690

675

111139 384

5 586

564

519

468

455

447

445

6753316

405

73175139

387

381

Market Size: Total Properties by Property TypeeMalahleni, 2013Freehold, Sectional Title and Estate properties

0 500 1000 1500 2000 2500 3000 3500


Buffer Zone

Tycoon

Dark City

eMalahleni Ext 16

Doornpoort SH

Ogies SP

Wilge SP

Seekoei SH

Tasbet Park

Hlalanikahle Ext 3

Ferrobank SP

Vezibuhle

Emsagweni

Paxton SP

Jackaroo AH

Witbank Dam Resort

Skoongesig SP

Heuwelfontein SH

New Largo SP

Siyabonga

Oyco

379

375

283

189

180

159

114

48

30

14

4

3

2

0

0

0

0

0

0

0

0

Property Type DescriptionFreeholdEstateSectional Title

Source: SA Deeds Registry via Lightstone (Pty) Ltd., 2015. All indicators reflect formal market data as reflect-

ed on the deeds registry.


Witbank Dam Resort

Bankenveld Estate

Hlalanikahle Ext 3Hlalanikahle Ext 2

Heuwelfontein SH

Tasbet Park Ext 3

eMalahleni Ext 10KwaGuqa Ext 18

eMalahleni NU

New Largo SP

Thubelihle SP

Lehlaka Park

Jackaroo AH

Emaforumini

Ga-Nala SP

Reno Ridge

Duvha Park

Valley Glen

Pine Ridge

New Stand

Clewer SP

Ogies SP

Klarinet

Distribution of Property typeseMalahleni, by total residential properties per suburb, 2013

Property Type Description

Estate

Freehold

Sectional Title

Total Residential properties

0

1 000

2 000

3 000

4 000

Source: South African Deeds Registry via Lightstone (Pty) Ltd. All indicators reflect formal market data as reflected onthe deeds registry.


20

9.7 Market Size by Households and Income

Understanding the distribution of households and incomes within eMalahleni helps to inform scale, development impact, marketing, outreach approaches and market targets. Census data is useful as the only source of demographic information consistently available at the suburb level, and provides interesting insights into local differences.

Areas with lower levels of renters (grey bars) also very often have the highest household incomes (such as Doornpoort, Bankenveld Estate and Fransville). It is suggested that these renters might be the combination of higher income executives who rent (instead of own) their homes, as well as support staff who live nearby in backyard accommodation.

Ratios of households (from StatsSA) to properties (from the deeds registry) can show degrees of constrained supply or informality. The informal settlements in Emsagweni and Vezibuhle, have high populations, low formal properties and low incomes.

0K 5K 10K

Households Renting (Grey)

0K 5K 10K

Total Households

0K 1K 2K 3K 4K


0 200 400 600

HHs to Properties Ratio

R 0,0K R 50,0K R 100,0K

Avg monthly HH income

KwaThomasMa..

Thubelihle SP

Ga-Nala SP

Vosman SP

eMalahleni NU

Reno Ridge

Thushanang

Klarinet

Del Judor Ext 4

Lynnville

eMalahleni

Central

Hlalanikahle Ext

3

Phola SP

Hlalanikahle Ext

1

KwaGuqa Ext 18

KwaGuqa Ext 14

KwaGuqa Ext 10

eMalahleni Ext

41

Hlalanikahle SP

Vosman Ext 17

New Stand

Lehlaka Park

Emavaga

Hlalanikahle Ext

2

KwaGuqa Ext 4

Dixon AH

Clewer SP

Buffer Zone

eMalahleni Ext 8

KwaGuqa Ext 5

Duvha Park

Tasbet Park

Emsagweni

Tasbet Park Ext

1

Tasbet Park Ext

2

Emaforumini

Model Park

Oyco

Schoongesicht

Jackaroo Park

eMalahleni Ext

10

Ben Fleur

Die Heuwel

Fransville

Jackaroo AH

Tycoon

Pine Ridge

Vezibuhle

Highveld Park

Tasbet Park Ext

3

Valley Glen

Ogies SP

Dark City

eMalahleni Ext

16

River View

Siyabonga

Heuwelfontein

SH

Bankenveld

Estate

Wilge SP

Paxton SP

Seekoei SH

Witbank Dam

Resort

Doornpoort SH

Ferrobank SP

New Largo SP

Skoongesig SP

7 899

4 423

4 307

3 904

3 792

3 288

3 224

3 044

2 834

2 803

2 642

2 462

2 398

2 276

2 081

2 059

2 017

2 013

1 959

1 928

1 827

1 761

1 688

1 550

1 528

1 491

1 488

1 363

1 313

1 207

1 199

1 199

1 126

1 112

1 075

1 023

910

769

767

715

682

680

674

605

503

493

484

464

453

435

422

351

340

317

259

238

221

212

203

190

121

44

27

17

17

14

36%

44%

46%

31%

30%

46%

34%

27%

29%

31%

81%

16%

15%

26%

22%

15%

25%

38%

25%

24%

20%

51%

24%

27%

18%

31%

52%

30%

44%

20%

24%

99%

35%

34%

27%

29%

32%

34%

25%

54%

51%

21%

30%

30%

39%

20%

23%

25%

25%

27%

40%

45%

13%

52%

41%

31%

21%

48%

29%

33%

30%

19%

24%

18%

57%

5%

1 815

1 469

1 349

2 888

1 259

3 363

1 567

1 087

1 373

1 476

1 350

1 820

1 010

1 074

1 994

2 862

1 542

1 052

1 162

1 031

1 541

2 641

1 101

1 261

445

675

695

375

405

455

468

519

379

768

159

189

387

447

963

283

987

387

436

856

690

594

564

634

114

180

831

381

48

30

14

3

0

0

0

0

0

0

4

0

0

2

175,9

154,7

563,0

40,0

1,5

1,5

0,5

1,5

1,5

2,5

1,5

2,5

0,5

1,5

2,8

9,9

1,9

0,9

1,8

1,8

5,7

1,3

2,3

1,3

1,7

3,3

1,3

1,3

0,7

4,3

1,7

0,7

3,3

1,7

2,6

5,6

3,6

1,6

1,0

2,4

1,4

1,4

1,4

1,0

1,2

2,2

1,2

1,2

1,2

1,2

0,2

0,2

1,2

1,1

1,1

1,1

1,1

1,1

R 38,4K

R 28,2K

R 22,5K

R 21,2K

R 37,9K

R 35,3K

R 12,4K

R 25,3K

R 27,1K

R 47,6K

R 11,7K

R 47,7K

R 54,6K

R 14,2K

R 12,4K

R 15,4K

R 13,0K

R 19,5K

R 44,9K

R 26,8K

R 22,7K

R 19,0K

R 35,6K

R 21,1K

R 11,6K

R 24,3K

R 35,9K

R 59,5K

R 23,0K

R 12,2K

R 27,4K

R 18,7K

R 67,8K

R 4,9K

R 4,3K

R 8,5K

R 4,4K

R 4,9K

R 8,0K

R 4,8K

R 5,9K

R 4,2K

R 9,6K

R 7,0K

R 5,0K

R 4,2K

R 4,7K

R 6,9K

R 4,1K

R 5,2K

R 7,7K

R 4,1K

R 5,9K

R 4,5K

R 6,1K

R 2,9K

R 7,0K

R 7,2K

R 9,8K

R 3,2K

R 3,0K

R 8,9K

R 9,0K

R 5,6K

R 2,5K

R 2,8K

Market Size: Households, Properties and IncomeeMalahleni, 2013Total households, renting, total properties, household to property ratio and average monthly income by suburb


21

10. Market Activity

10.1 Key Findings

Sales of units appear to be evenly distributed throughout the municipality; however the highest volumes appear in mostly upper income areas. Sales dropped across the country after 2008, and in eMalahleni they have picked up slowly afterwards, mostly in higher priced housing.

Bonded sales in lower markets are an extremely small portion of the bonded market. Although sales continue to be dominated by repeat sales, sales of properties which have never appeared on the deeds registry are increasing in several subplaces throughout the municipality. Property values (the home’s worth) and sales prices are closely related in active markets; in less active markets, sales prices are significantly less than their suggested value.


Focus on increasing access to lending, determining what barriers exist to make credit more accessible, either through lower cost products, more flexible terms, and/or inclusion of existing debt into a mortgage loan product. These products should be tailored to meet the needs of the lower income markets.

Create financing products which can bring down the cost of quality rental housing as an affordable alternative to homeownership for lower income families.


Market Activity: performance of key housing property market indicators over time, such as sales, bonds, registrations and churn.

Market Share: the portion of the market according to certain indicators, such as loans, types of properties, or property values.

Property Value Segment: in order to better understand the performance of housing markets, data has been grouped into four property value bands: properties valued under R250 000; between R250 000 and R500 000; between R500 000 and R1.2 million and over R1.2 million. This helps one to understand the various trends and strengths within each segment, and to see how properties are integrating across the housing continuum, especially over time.

Bonded Sale: a transfer of deed on the deeds registry with an associated bond from a lender, including the property as collateral for the bond. New Sale / New Registration: the appearance of a residential property on the deeds registry for the first time. It might include new construction or previously existing units being recorded for the first time (such as previously built RDP homes).

Resale / Repeat Sales: the sale or transaction of a property which has existed on the deeds registry before (as opposed to a new sale or new registration).


22

10.4 Sales and Bonded Sales by Property Value Segments

Almost 90% of all residential sales and bonded sales in eMalahleni have been over R500 000 (the red and orange sections). Market share (the percentage of the total) by property value segment has remained remarkably consistent since 2008, suggesting a highly controlled and managed housing market, and the importance of access to credit to growing housing markets. The proportion of bonded loans under R500 000 has shifted over time, dropping from 16% in 2008 to 9% in 2013. This might be due to credit indebtedness, which disproportionately impacts lower income borrowers (in particular miners), or lack of access to affordable homes with which to buy. Policies which help expand access to credit and provide more housing opportunities under R500 000, in the lower bands, can expand the number and market share of transactions within that band. Rental housing might also be a more suitable option.

2008 2009 2010 2011 2012 2013

0

500

1000

1500

2000

2500

3000

3500

To

tal R

es

ide

nti

al S

ale

s

21%20%22%19%19%14%

66%66%

66%66%

62%

65%

9%

8%

9%

10%

10%

16%

4%

5%

4%

6%

9%

5%

Total Sales by Property Value SegmenteMalahleni, 2008 - 2013All residential sales


Under R250k



Over R1.2M

Source: SA Deeds Registry via Lightstone (Pty) Ltd., 2015. All indicators reflect formal marketdata as reflected on the deeds registry.

2008 2009 2010 2011 2012 2013

0

500

1000

1500

2000

2500

3000

3500

To

tal B

on

de

d R

es

ide

nti

al S

ale

s

20%21%21%19%20%14%

70%

68%69%71%

67%

70%

7%

7%7%

8%

8%

14%

2%

4%3%

3%

5%

2%

Total Bonded Sales by Property Value SegmenteMalahleni, 2008 - 2013All residential sales


Under R250k



Over R1.2M

Source: SA Deeds Registry via Lightstone (Pty) Ltd., 2015. All indicators reflect formal marketdata as reflected on the deeds registry.


23

10.5 Lending per Property Value Segments

The chart shows by contrast the percentage of sales within the various property value groups including bonds. Overall, the percentage of sales receiving bonds in eMalahleni went down over the past six years; however the drop was not evenly experienced across the value segments. The lowest property values (the green line) experienced the greatest increase and decrease since 2011, perhaps driven more by increased access to credit or other loan products made available by the mines (“other” lenders), as the shift interestingly coincides with the increased investment of “other” lenders.

The upper tiered properties more closely reflect the activity of overall bonded sales rates across the country. The upper-priced properties continue a steady downward trend overall, perhaps due to market overexposure, or fewer eligible buyers. Mid-range sales experienced a recent upsurge in bonding, perhaps due to new housing being added, such as the new sectional title units which likely fit into this price range.

2008 2009 2010 2011 2012 2013

Year

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Pe

rce

nt

of S

ale

s B

on

de

d

81%

70%

88%

77%

71%

58%

45%

41%

Percent of Sales Bonded by Value SegmenteMalahleni, All residential sales, 2008 - 2013

Market Segment

Under R250K

Betw R250K- R500K

Betw R500K - R1.2M

Over R1.2M

10.6 Sales by Property Value Segments

This map shows the volume of sales activity (the size of the dot) by suburb across the town, by property value segment (the slices of the pie). Sales were evenly distributed across the municipality, even if the property values were less evenly distributed. The higher-valued properties (in the red and orange) saw most activity; the lower-priced homes (green and blue) also saw some sales activity, a potential sign of active (increased) supply and steady demand.

Access to credit is a significant boost or barrier to housing market growth. While some suburbs offer a range of housing price options; pinpointing product prices and types to specific areas; especially considering local affordability, is important to ensuring programme success.


Witbank Dam Resort

Bankenveld Estate

Hlalanikahle Ext 3

Heuwelfontein SH

Tasbet Park Ext 3

eMalahleni Ext 16

Tasbet Park Ext 2

Hlalanikahle Ext 1

eMalahleni Ext 41

KwaGuqa Ext 18

eMalahleni Ext 8Skoongesig SP

eMalahleni NU

New Largo SP

Highveld Park

Thubelihle SP

Lehlaka Park

Jackaroo AH

Emaforumini

Ga-Nala SP

Duvha Park

Seekoei SH

Pine Ridge

New StandSiyabonga

Paxton SP

Clewer SP

Ogies SP

Klarinet

Sales by Property Value SegmentseMalahleni, by suburb, 2013


Under R250k


Between R500k - R1.2m

Over R1.2m


0

50

100

≥ 150

Source: South African Deeds Registry via Lightstone (Pty) Ltd, 2015. All indicators reflect formal market data as reflected on thedeeds registry.


24

10.7 Sales by New and Repeat Sales

An important distinction in market performance is the transacting of new homes (which have never appeared on the deeds registry) and the resale of existing homes. New sales often represent the recent registration of Government-sponsored housing investment. The chart shows new (green) and repeat sales (orange) by suburb. New sales in eMalahleni appear much more diversely located than other similar municipalities. A key follow up will be determining what is driving the growth of new units on the deeds registry.

An important point is to recognise the impact of newly registered Government investment in housing. Often these registrations may be perceived as a market distortion, but the deeds issued on Government-sponsored housing represent real assets which now can be traded and collateralised, and are key to moving up the housing ladder. Thus, the housing market has in fact grown.

Suburbs with no data reflect areas with no

sales or new registrations.

0 10 20 30 40 50 60 70 80 90 100 110 120 130 140

Value

Bankenveld Estate

Ben Fleur

Buffer Zone

Clewer SP

Dark City

Del Judor Ext 4

Die Heuwel

Dixon AH

Doornpoort SH

Duvha Park

Emaforumini

eMalahleni Central

eMalahleni Ext 8

eMalahleni Ext 10

eMalahleni Ext 16

eMalahleni Ext 41

eMalahleni NU

Emavaga

Emsagweni

Ferrobank SP

Fransville

Ga-Nala SP

Heuwelfontein SH

Highveld Park

Hlalanikahle Ext 1

Hlalanikahle Ext 2

Hlalanikahle Ext 3

Hlalanikahle SP

Jackaroo AH

Jackaroo Park

Klarinet

KwaGuqa Ext 4

KwaGuqa Ext 5

KwaGuqa Ext 10

KwaGuqa Ext 14

KwaGuqa Ext 18

KwaThomasMahlanguv..

Lehlaka Park

Lynnville

Model Park

New Largo SP

New Stand

Ogies SP

Oyco

Paxton SP

Phola SP

Pine Ridge

Reno Ridge

River View

Schoongesicht

Seekoei SH

Siyabonga

Skoongesig SP

Tasbet Park

Tasbet Park Ext 1

Tasbet Park Ext 2

Tasbet Park Ext 3

Thubelihle SP

Thushanang

Tycoon

Valley Glen

Vezibuhle

Vosman Ext 17

Vosman SP

Wilge SP

Witbank Dam Resort

15

6

38

60

13

5

2

1

129

5

53

46

45

86

35

16

15

39

0

2

80

2

42

0

37

8

13

0

58

0

72

2

0

0

18

0

79

44

0

0

19

2

0

1

0

2

0

0

25

15

7

0

23

6

16

3

25

1

25

3

18

0

14

0

10

4

8

1

17

80

1

1

8

0

12

3

11

0

137

45

104

46

4

1

0

1

2

1

28

0

31

0

58

0

0

1

3

0

6

1

19

0

0

1

0

1

Total Sales by Sales TypeeMalahleni, New and Repeat Sales, 2013

Sales Type

Total Repeat Sales

Total New Sales

Source: South African Deeds Registry via Lightstone (Pty) Ltd, 2015. All indicators reflect formal market data as reflected on the deeds registry.


25

10.8 Market Activity amongst New and Repeat Sales The growth and maturity of housing markets can often be detected by comparing the interaction between new and resale market transactions over time. The growth of existing home sales (the orange line) indicates sustained interest of housing markets by borrowers and lenders. The thicker lines reflect areas with more sales.

Often volumes of new homes in prior years become resales in later years (for example, River View’s slight uptick of resales in 2013). Understanding how mining companies create new units helps to understand their existing and potential contribution to expanding the local housing economy.

Bankenveld Estate

Ben Fleur

Buffer Zone

Clewer SP

Dark City

Del Judor Ext 4

Die Heuwel

Dixon AH

Doornpoort SH

Duvha Park

Emaforumini

eMalahleni Central

eMalahleni Ext 8

eMalahleni Ext 10

eMalahleni Ext 16

eMalahleni Ext 41

eMalahleni NU

33

37

38

15

48

22

2 664 77

38

34

51

32

47

30

42

84

33

60

24

16

11

00

577

999

13

51

11

8

00

3

2

54

11

2

00000

199

142

138

135

129

12164

8

5

21 0

31

4634

2119

16

53

525

311

116

58

57

57

93

45

101

180

96 86

149

74

14

415 7 16

3435

49

2725

2729

303917 19

94

15

71

114 119

127

222

11

000

00

7164

100

80

5447

825 13

2

20

5172 58

434342

13

2

0

00

4141

39

53

37

31

229 1 80

1313

12

5

15

19

00000

0

68 6452

83

5880

2 14

4 0

0

2

170

7255

Sales Trends by Sales TypeeMalahleni, 2008 - 2013New and Repeat Sales

Emavaga

Emsagweni

Ferrobank SP

Fransville

Ga-Nala SP

Heuwelfontein SH

Highveld Park

Hlalanikahle Ext 1

Hlalanikahle Ext 2

Hlalanikahle Ext 3

Hlalanikahle SP

Jackaroo AH

Jackaroo Park

Klarinet

KwaGuqa Ext 4

KwaGuqa Ext 5

KwaGuqa Ext 10

KwaGuqa Ext 14

00

000

00

000

2829 30

18

35

21

12

0

303

108

169

116

82

79

6930

16 44

43

14

13

00000

0 00000

0

30

31

3128

19

38

2200

33

22

1

000

111

000

3

6

22

1 0000

0

00000

0 00000

0

373680 60

2518

165

68 27 20

1510

5

3

30

77

28

0000

20

46

82

50

3125

234 0

6

6

61

24 23

43

1916

1622

20

4

3

29

62

26

25

18171

00000

41

73

44

30

29

25

23

014

4


26

KwaGuqa Ext 18

KwaThomasMahlang..

Lehlaka Park

Lynnville

Model Park

New Largo SP

New Stand

Ogies SP

Oyco

Paxton SP

Phola SP

Pine Ridge

Reno Ridge

River View

Schoongesicht

Seekoei SH

Siyabonga

23

2127

1820

25

9

3

11 0

0

2516

161614

145

5

13

4

3 0

55

449 0

17

47

22

1010

1

88

1310

76

1

6

000

4

118138

94

121

9280

41

44

39

3870

17

11 1

0

8129

2

211

4

000

3

21

43

15

30

1412

6 3

11

22

10

24

13

12

111110

6

13

73

30

203

331

222177 156

13765

202

45

33 2217

1846

22

12

54

43

104

3935

2915

7

55

1212

4

6

2

11

00

1

000 0000

2008 2009 2010 2011 2012 2013

Year

Skoongesig SP

Tasbet Park

Tasbet Park Ext 1

Tasbet Park Ext 2

Tasbet Park Ext 3

Thubelihle SP

Thushanang

Tycoon

Valley Glen

Vezibuhle

Vosman Ext 17

Vosman SP

Wilge SP

Witbank Dam Resort

111

3

2

0

3

22

000

27

27

28

34

1923

212

4

0

0

40

37

52 45

3231

0

000 1

1

25

58

23

2113

12

3

511

0

4

4

111

55

11

1

3

00

33

1

44

2

000

0

7

11

666

1010

2

2 111

23

30

19

18 16

27

00000

0

11

00

33

5

221

3

10

4

000

Sales Type

Total New Sales

Total Repeat Sales

Market Activity amongst New and Repeat Sales Continued


27

10.9 Total Sales by Property Value, Change From The Prior Year This chart shows the change in activity for property sales (columns 1 and 2) and bonded property sales (columns 3 and 4) from 2012 to 2013. It is possible to see important market shifts by comparing the change in activity within particular property markets from one year to the next.

Despite the increase in loans to upmarket (red) properties, several low and middle market areas between R500 000 and R1.2 million are experiencing growth, such as Die Heuwel near downtown, Kwa Guqa and Lehlaka Park, which are growing in transactions and bonds and is surrounded by Government-sponsored housing. Even Del Judor, with one of the highest average property values, has had a boost of transactions under R500 000.

Suburbs with no information had no residential sales transactions in the past

two years.

0 50 100 150


0% 200% 400%

Change in Residential Sales

0 50 100


-200% 0% 200%

Change in Bonded Residential Sales

Bankenveld Estate

Ben Fleur

Clewer SP

Dark City

Del Judor Ext 4

Die Heuwel

Dixon AH

Doornpoort SH

Duvha Park

Emaforumini

eMalahleni Central

eMalahleni Ext 8

eMalahleni Ext 10

eMalahleni Ext 16

eMalahleni Ext 41

eMalahleni NU

Ferrobank SP

Fransville

Ga-Nala SP

Heuwelfontein SH

Highveld Park

Hlalanikahle Ext 1

Hlalanikahle SP

Jackaroo AH

Jackaroo Park

Klarinet

KwaGuqa Ext 4

KwaGuqa Ext 5

KwaGuqa Ext 10

KwaGuqa Ext 14

KwaGuqa Ext 18


Lehlaka Park

Lynnville

Model Park

New Stand

Ogies SP

Phola SP

Pine Ridge

Reno Ridge

River View

Schoongesicht

Seekoei SH

Tasbet Park

Tasbet Park Ext 1

Tasbet Park Ext 2

Tasbet Park Ext 3

Thubelihle SP

Thushanang

Tycoon

Valley Glen

Vosman Ext 17

Wilge SP

21 -28% 12 0%

48 50 4931

84 6 -85%

100% 0%

5568 10 233% 3552

8811 96% 719 97%

11711 10810

51 24% 29 -3%

40 14 28 14

2 0

1356 40 99

40 29

15 26 4 209 200%

11 8

52 500% 40 300%

72 70 35%

6 7

107 6 200% 849 4 100%

17 4 16

1 -50% 0

0%

0 0

40 -30% 34 -29%

7 0%

22 13

17 6% 13 44%

22 100% 15 100%

1314 12 6

9 150% 100%

8 7 100%

5 200% -50%

-50%

4552 2336

12 8

9 6

11464 8549

149 314% 128 357%

1 0

3 50% 0

26 0% 20 -9%

31 -14% 28 -7%

58 142% 16 7%

1 0

3 0

7 75% 1

16 200% 12 100%

1 0% 0

1 -88% 0 -100%

Market Activity: Total Sales and Change in SaleseMalahleni, 2012 - 2013Change in residential and bonded sales




Over R1.2M

Under R250k

Source: SA Deeds Registry via Lightstone (Pty) Ltd., 2015. All indicators reflect formal market data as reflected on the deeds registry.


28

10.10 Change in New and Repeat Sales This chart shows the change in new (columns 3 and 4) and repeat sales (columns 1 and 2) from 2012 to 2013. KwaGuqa Ext 5 has experienced modest yet stable sales activity of repeat sales. Klarinet experienced very few sales overall, similarly in Hlalanikahle Ext 1.

Many of the developments built by the Government are heading into their 8th year, and become eligible for resale by their owners. By understanding when those units come online for resale, Government can align policies which encourage sale and development nearby, which can help leverage that prior investment, expand housing options and stimulate movement up the housing continuum. Resales are an important means of recycling existing homes to make more housing options available. Suburbs with no information had no residential sales in the past two years.

Bankenveld Estate

Ben Fleur

Buffer Zone

Clewer SP

Dark City

Del Judor Ext 4

Die Heuwel

Dixon AH

Doornpoort SH

Duvha Park

Emaforumini

eMalahleni Central

eMalahleni Ext 8

eMalahleni Ext 10

eMalahleni Ext 16

eMalahleni Ext 41

eMalahleni NU

Emavaga

Emsagweni

Ferrobank SP

Fransville

Ga-Nala SP

Heuwelfontein SH

Highveld Park

Hlalanikahle Ext 1

Hlalanikahle Ext 2

Hlalanikahle Ext 3

Hlalanikahle SP

Jackaroo AH

Jackaroo Park

Klarinet

KwaGuqa Ext 4

KwaGuqa Ext 5

KwaGuqa Ext 10

KwaGuqa Ext 14

15 -31,8% 6 -14%

38 18,8% 60 43%

-100,0%

5 -44,4% 13 -75%

1 0,0% 2

129 6,6% 5 150%

46 48,4% 53 112%

45 -22,4% 86 -52%

16 14,3% 35 30%

39 34,5% 15 -84%

2 100,0% 0

80 12,7% 2 0%

42 -2,3% 0

37 -9,8% 8 700%

13 0,0% 0

58 11,5% 0 -100%

2 -98,8% 72 31%

0 0

18 -35,7% 0 -100%

79 14,5% 44 238%

0 0

19 -38,7% 2

1 -50,0% 0

-100,0%

2 100,0% 0

0 0

25 -32,4% 15 -25%

7 0,0% 0

23 -8,0% 6

16 0,0% 3 50%

25 38,9% 1

25 -13,8% 3

Market Activity: Total Sales and Change from previous yeareMalahleni, 2012 - 2013Change in new and repeat sales

0 50 100 150

Total Repeat Sales

-200% 400%

Change in Repeat Sales

0 50 100

Total New Sales

0% 1000%

Change in New Sales

KwaGuqa Ext 18


Lehlaka Park

Lynnville

Model Park

New Largo SP

New Stand

Ogies SP

Oyco

Paxton SP

Phola SP

Pine Ridge

Reno Ridge

River View

Schoongesicht

Seekoei SH

Siyabonga

Skoongesig SP

Tasbet Park

Tasbet Park Ext 1

Tasbet Park Ext 2

Tasbet Park Ext 3

Thubelihle SP

Thushanang

Tycoon

Valley Glen

Vezibuhle

Vosman Ext 17

Vosman SP

Wilge SP

Witbank Dam Resort

18 -14,3% 0 -100%

14 -12,5% 0 -100%

4 0,0% 10 900%

8 14,3% 1 -75%

80 -13,0% 17 -55%

1 1

8 300,0% 0 -100%

12 -14,3% 3 50%

11 0,0% 0 -100%

137 -12,2% 45 105%

46 109,1% 104 593%

4 -20,0% 1 -50%

1 0

1 2 0%

28 21,7% 0 -100%

31 -13,9% 0

58 176,2% 0 -100%

1 -80,0% 0 -100%

3 200,0% 0

6 0,0% 1 0%

19 18,8% 0

1 0,0% 0

1 -80,0% 0 -100%



29

Bankenveld Estate

Ben Fleur

Buffer Zone

Clewer SP

Dark City

Del Judor Ext 4

Die Heuwel

Dixon AH

Doornpoort SH

Duvha Park

Emaforumini

eMalahleni Central

eMalahleni Ext 8

eMalahleni Ext 10

eMalahleni Ext 16

eMalahleni Ext 41

eMalahleni NU

Emavaga

Emsagweni

Ferrobank SP

Fransville

Ga-Nala SP

R 2 128K R 2 683K

R 932KR 1 259K

R 893K R 1 113K

R 722KR 904K

R 121K

R 177K

R 100K

R 230K

R 316KR 434K

R 123K R 136K

R 173K

R 263K

R 156KR 123K

R 884K R 1 129K

R 707K

R 1 066K

R 812K R 1 005K

R 786K R 808K

R 340K

R 528K

R 202K

R 509K

R 1 824KR 2 598K

R 666KR 992K

R 610K R 688K

R 287K

R 501K

R 187KR 284K

R 170K

R 30K

R 628K R 758K

R 520K

R 817K

R 585K R 749K

R 620KR 714K

R 721K R 902K

R 639K

R 937K

R 807K R 1 050K

R 654K R 799K

R 642K R 823K

R 614K

R 801K

R 398K

R 267K

R 57K

R 175K

R 45KR 69K

R 59K R 75K

R 70KR 93K

R 1 259K R 1 621K

R 1 141K

R 1 431K

R 595KR 786K

R 535KR 666K

Market Activity: Average Property Values and Sales PriceseMalahleni, 2007 - 2013Property value and sales price by suburb

Heuwelfontein SH

Highveld Park

Hlalanikahle Ext 1

Hlalanikahle Ext 2

Hlalanikahle Ext 3

Hlalanikahle SP

Jackaroo AH

Jackaroo Park

Klarinet

KwaGuqa Ext 4

KwaGuqa Ext 5

KwaGuqa Ext 10

KwaGuqa Ext 14

KwaGuqa Ext 18


Lehlaka Park

Lynnville

Model Park

New Largo SP

New Stand

Ogies SP

Oyco

Paxton SP

R 1 124K R 1 449K

R 765K

R 1 102K

R 44KR 58K

R 58K R 60K

R 54KR 72K

R 78K

R 50K

R 75K R 97K

R 125KR 173K

R 32K R 39K

R 517K R 669K

R 266K

R 527K

R 56K

R 85K

R 43K

R 89K

R 193K

R 268K

R 170K

R 267K

R 223KR 309K

R 164K

R 259K

R 179KR 248K

R 173K

R 266K

R 325KR 451K

R 314KR 365K

R 194KR 268K

R 216KR 249K

R 224K

R 311K

R 141K

R 402K

R 219KR 284K

R 67KR 114K

R 195K

R 270K

R 104K

R 206K

R 876K R 1 134K

R 545K

R 850K

R 228KR 347K

R 40K R 25K

R 389K R 509K

R 232K

R 458K


30

10.11 Average Property Values and Sales Price

The relationship between local sales prices (orange lines) and average property values (blue lines) can tell much about the activity and integration of supply and demand. Every house in a suburb has a value, driven by the number of sales, appreciation, churn (repeat sales) and other factors present in a robust housing market. Only houses which have transacted have sales prices, but this lowers the value of homes in markets with fewer sales.

As markets formalise and strengthen, these trends inform each other more effectively, and become almost parallel. It’s also possible to see this happen over time (such as Phola SP, Wilge, and parts of Kwa Guqa Ext 5).

Sales in many areas of eMalahleni have been robust and values are rising in some areas, indicating steady demand. Rising sales prices in affordable areas can reflect improved access to credit, as well as increasing interest in the neighbourhood.

2008 2009 2010 2011 2012 2013

Phola SP

Pine Ridge

Reno Ridge

River View

Schoongesicht

Seekoei SH

Siyabonga

Skoongesig SP

Tasbet Park

Tasbet Park Ext 1

Tasbet Park Ext 2

Tasbet Park Ext 3

Thubelihle SP

Thushanang

Tycoon

Valley Glen

Vezibuhle

Vosman Ext 17

Vosman SP

Wilge SP

Witbank Dam Resort

R 213K

R 322K

R 134K

R 315K

R 454KR 594K

R 334K

R 625K

R 774K R 968K

R 538K

R 726K

R 672K R 796K

R 304K

R 680K

R 328KR 454K

R 368KR 310K

R 1 459K R 1 888K

R 1 600K

R 584K R 762K

R 460K

R 227K

R 549K R 713K

R 578KR 682K

R 580K R 754K

R 557K

R 734K

R 638K R 834K

R 488KR 593K

R 205KR 312K

R 89KR 20K

R 182K

R 253K

R 63K

R 203K

R 303KR 436K

R 116K R 134K

R 610KR 793K

R 494K

R 851K

R 139K R 179K

R 92KR 127K

R 25K

R 50K

R 170K R 214K

R 335K

R 510K

R 183K

R 460K

Measure Names

Average Property value

Avg Sales Price



31

11. Lending Activity

11.1 Key Findings

Lending by area and loan size is highly active throughout eMalahleni. Bonded sales are almost entirely concentrated in housing and sales over R500 000, with those loans predominantly concentrated in higher priced housing markets. While the share of lending by each of the four major banks in the country has remained consistent, lending from non-traditional lenders has consistently increased in eMalahleni from 2008 to 2013, perhaps to make up for the lack of expanded lending by the existing institutions. In 2013, almost one-third of all residential loans in eMalahleni were Eskom related.


Policies and programmes should target expanding access to credit, including the creation of new funds, with broader investment guidelines and possibilities, and small loan programmes with which to make financing more accessible to lower-income households. Existing lenders should take lower incomes into account by reducing finance costs.

Loans to entice the development of more middle-market housing would create more integrated markets.

Programmes should make creative finance available for rental projects as well.


Lending Activity: the performance of key lending indicators over time, such as bond volume, new loans and bonded sales, by lending institution.

Portfolio Size: the total number and value of loans given out by particular lending institutions in the study area.

Property Value Segment: in order to better understand the performance of housing markets, data has been grouped into four property value bands: properties valued under R250 000; between R250 000 and R500 000; between R500 000 and R1.2 million and over R1.2 million. This helps one to understand the various trends and strengths inherent in each segment, and to see how properties are integrating across the housing continuum, especially over time.

Residential Bond: a loan made for the intention of acquiring a property, which is secured by the title to the property. These are determined by the property address and the timing with which bonds and sales transactions are recorded on the deeds registry.


32

11.4 Lending Over Time

Loan data taken from the deeds registry can provide lending activity by lender, which has grown consistently in the area. By comparing the top chart, all loans held by each lender, to the bottom chart, activity per year, it’s possible to see a major reduction of FNB’s lending in the area since 2009. In fact, over the past six years, each traditional lender has increased their portfolio by very similar amounts, between R135 million and R300 million per year.

The real game changer has been the infusion of other lenders into the area. Further analysis reveals 97% of “other” lenders in the area are Eskom-related finance companies. In 2013, almost one-third of all residential loans in eMalahleni were Eskom related.

The following charts explore lending by bank by suburb to understand more specifically where bank investment has been made, and what that implies about financing availability for various development sites and scenarios.

The “other” lenders have invested throughout most areas of eMalahleni, surely driving much of the market growth seen in the housing performance overall.

2008 2009 2010 2011 2012 2013

R 0M

R 2 000M

R 4 000M

R 6 000M

R 8 000M

R 10 000M

R 12 000M

R 14 000M

Valu

e o

f R

esid

en

tial

Bo

nd

s

R 3 028M

R 3 201M

R 3 350M

R 3 461M

R 3 604M

R 3 784M

R 1 338MR 1 428M

R 1 558M

R 1 695M

R 1 831M

R 1 991M

R 1 683MR 1 851M

R 2 004M

R 2 080M

R 2 183M

R 2 289M

R 2 024MR 2 175M

R 2 407MR 2 737M

R 3 089MR 3 403M

R 1 222M R 1 610M R 2 032M R 2 407M R 2 741M

R 966M

All Loans by LendereMalahleni, 2008 - 2013Total value of residential bonds by lender

Banks

ABSA

FNB

Nedbank

Standard Bank SA

Other Lenders


2008 2009 2010 2011 2012 2013

R 0M

R 200M

R 400M

R 600M

R 800M

R 1 000M

R 1 200M

R 1 400M

R 426M

R 174M

R 148MR 111M R 143M

R 180M

R 259MR 130M

R 137M R 136M

R 161M

R 269M

R 168M

R 153M

R 103M

R 107M

R 350M

R 151M

R 232M

R 330MR 352M

R 314M

R 255M

R 388M R 422M R 376MR 333M

R 90M

R 76M

R 64M

New Loans by LenderEmalahleni, 2008 - 2013Total value of residential bonds by lender

Banks

ABSA

FNB

Nedbank

Standard Bank SA

Other Lenders



33

11.5 New Loans by Lender

As markets shift, different lenders respond in different ways. These maps show the previous bar charts on a map. The first chart (all loans by lender) is represented on the top map. All loans made last year (the second chart) is shown on the lower map. By comparing the two maps, it’s possible to see where lenders invested loans in 2013 (slices in the bottom map), and how that has changed from their overall portfolio in that suburb (slices in the top map).

The most important trend of note is the rise of “other” lenders, which further analysis reveals to be Eskom-related companies, most likely employee-related bonds. The expansion of the grey portion of the pie charts shows the impact these loans have had on the local markets, even as lending by traditional lenders has remained consistent (charts below).

Non-traditional lenders, such as private equity funds and employer lenders, have more flexible regulatory environments and more creative, competitive financing tools. It will be important for Government to engage these investors to ease access to credit, lower costs of financing and share in the commitment towards growing housing markets in the mining towns.

The areas with no dots have no residential properties on the deeds registry – they are farms or open space, mines or power plants, or informal settlements.


Bankenveld Estate

Hlalanikahle Ext 2

Heuwelfontein SH

Tasbet Park Ext 3

KwaGuqa Ext 18

KwaGuqa Ext 10

eMalahleni Ext 8

Schoongesicht

eMalahleni NU

Jackaroo Park

Highveld Park

Thubelihle SP

Lehlaka Park

Jackaroo AH

Emaforumini

Ga-Nala SP

Reno Ridge

Duvha Park

Model Park

Pine Ridge

New Stand

River View

Clewer SP

Ogies SP

Wilge SP

Klarinet

Market Share by Lender: All Residential Bonds eMalahleni, all loans, by suburb by lender, through 2013

Lenders

ABSA

FNB

Nedbank

Standard Bank

Other Lenders

Total Residential Bonds

0

1 000

2 000

3 000

≥ 4 000

Source: South African Deeds Registry via Lightstone (Pty) Ltd. All indicators reflect formal market data as reflected on the deeds registry.

Jackaroo Park


Bankenveld Estate

Hlalanikahle Ext 2

Heuwelfontein SH

Tasbet Park Ext 3

eMalahleni Ext 16

Tasbet Park Ext 2

KwaGuqa Ext 18

KwaGuqa Ext 10

eMalahleni Ext 8

eMalahleni NU

Highveld Park

Thubelihle SP

Lehlaka Park

Jackaroo AH

Emaforumini

Ga-Nala SP

Duvha Park

Pine Ridge

New Stand

Clewer SP

Ogies SP

Wilge SP

Klarinet

Market Share by Lender: New Loans 2013eMalahleni, all new loans made, by suburb by lender, 2013

Lenders

ABSA

FNB

Nedbank

Standard Bank

Other Lenders

Total Residential Bonds

0

50

100

155

Source: South African Deeds Registry via Lightstone (Pty) Ltd. All indicators reflect formal market data as reflected on the deedsregistry.


34

11.6 Market Share

Understanding market share at the local level is key to understanding the potential for end-user finance, where gaps might exist, and how to make the case for more lending. It’s possible to see the impact of other lenders investment in eMalahleni by suburb, and how that lending has stimulated the housing markets overall.

Comparing lending over time and by suburb also shows which lenders perceive value or risk.

Emalahleni

ABSA FNB NedbankStandard

Bank

Other

Lenders

Bankenveld

Estate

2008

2009

2010

2011

2012

2013

Ben Fleur 2008

2009

2010

2011

2012

2013

Buffer Zone 2008

2009

2010

2011

2012

2013

Clewer SP 2008

2009

2010

2011

2012

2013

Dark City 2008

2009

2010

2011

2012

2013

Del Judor Ext 4 2008

2009

2010

2011

2012

2013

Die Heuwel 2008

2009

2010

2011

2012

2013

Dixon AH 2008

2009

2010

2011

2012

2013

Doornpoort SH 2008

2009

2010

2011

2012

2013

Duvha Park 2008

2009

2010

2011

2012

2013

Emaforumini 2008

2009

2010

2011

2012

2013

eMalahleni

Central

2008

2009

2010

2011

2012

2013

eMalahleni Ext

8

2008

2009

2010

2011

2012

2013

eMalahleni Ext

10

2008

2009

2010

2011

2012

2013

eMalahleni Ext 2008

R 4,800,000

R 6,652,000

R 10,236,000

R 9,909,000

R 5,821,340

R 1,630,000

R 3,542,500

R 7,980,000

R 8,118,198

R 8,160,000

R 5,130,000

R 2,149,250

R 13,993,000

R 9,175,000

R 6,927,000

R 14,719,000

R 1,850,000

R 3,571,585

R 0

R 0

R 0

R 0

R 0

R 0

R 7,627,000

R 21,433,141

R 21,690,000

R 17,978,288

R 23,632,719

R 1,325,000

R 12,720,000

R 12,200,000

R 6,155,000

R 750,000

R 1,050,000

R 0

R 45,542,398

R 67,281,554

R 52,471,508

R 20,602,000

R 27,537,292

R 422,901

R 20,539,000

R 10,435,000

R 1,100,000

R 8,600,000

R 1,631,000

R 2,440,000

R 20,420,000

R 33,816,700

R 30,534,000

R 28,532,000

R 18,251,676

R 10,537,500

R 0

R 0

R 0

R 0

R 0

R 0

R 0

R 0

R 490,000

R 530,000

R 0

R 86,600

R 0

R 0

R 0

R 0

R 0

R 0

R 16,076,000

R 29,678,133

R 22,291,860

R 37,686,000

R 7,250,131

R 1,500,000

R 11,200,000

R 2,000,000

R 12,445,000

R 4,941,710

R 2,450,000

R 0

R 7,720,000

R 5,521,000

R 3,954,500

R 1,675,000

R 980,000

R 11,948,741

R 9,317,800

R 9,740,500

R 13,650,400

R 7,894,500

R 4,114,000

R 11,292,000

R 13,842,000

R 6,859,300

R 7,067,000

R 4,946,399

R 3,850,500

R 13,077,300

R 0

R 0

R 0

R 131,722

R 0

R 0

R 7,724,000

R 11,664,601

R 8,529,691

R 1,937,455

R 4,441,500

R 12,567,050

R 10,663,485

R 15,265,308

R 14,455,000

R 10,192,051

R 10,515,000

R 0

R 21,942,820

R 44,960,725

R 35,770,850

R 19,098,218

R 11,391,880

R 12,915,326

R 17,638,800

R 11,068,100

R 5,723,750

R 1,915,000

R 665,000

R 2,920,000

R 27,014,500

R 31,572,250

R 25,431,700

R 14,147,500

R 10,521,500

R 28,016,800

R 160,000

R 208,000

R 757,000

R 0

R 0

R 0

R 2,023,863

R 12,251,747

R 1,937,248

R 0

R 0

R 40,000

R 0

R 0

R 0

R 0

R 0

R 61,000

R 31,291,648

R 17,963,859

R 22,549,831

R 23,588,425

R 7,072,000

R 10,045,000

R 4,702,852

R 3,152,977

R 14,920,000

R 10,538,000

R 6,960,000

R 21,945,000

R 4,361,700

R 1,630,200

R 925,000

R 1,599,071

R 3,092,557

R 12,173,860

R 2,494,600

R 1,912,900

R 4,352,937

R 2,320,961

R 3,240,725

R 8,261,737

R 3,020,400

R 7,253,992

R 864,000

R 2,768,073

R 3,284,286

R 9,105,769

R 0

R 0

R 0

R 0

R 0

R 0

R 0

R 1,695,897

R 1,431,400

R 6,856,175

R 6,770,430

R 23,292,476

R 7,758,500

R 8,426,400

R 7,127,780

R 0

R 3,223,471

R 0

R 1,357,400

R 5,346,327

R 2,416,000

R 18,763,258

R 22,622,183

R 21,700,128

R 5,448,654

R 4,191,100

R 875,700

R 5,014,300

R 0

R 6,415,575

R 5,183,105

R 7,223,000

R 9,376,703

R 18,280,161

R 13,230,043

R 21,821,636

R 0

R 0

R 0

R 0

R 220,512

R 454,385

R 0

R 0

R 0

R 146,125

R 1,517,349

R 961,671

R 0

R 0

R 0

R 0

R 0

R 0

R 12,875,200

R 10,676,197

R 3,718,914

R 12,886,493

R 757,297

R 7,334,816

R 11,160,000

R 5,075,000

R 4,844,700

R 3,325,500

R 6,823,000

R 6,810,260

R 2,289,000

R 3,771,700

R 1,854,820

R 389,000

R 3,455,000

R 3,898,000

R 2,077,500

R 850,000

R 418,500

R 975,000

R 650,000

R 5,964,200

R 2,168,750

R 5,568,790

R 1,460,000

R 4,440,000

R 3,087,450

R 15,312,800

R 0

R 0

R 0

R 0

R 0

R 0

R 4,671,000

R 19,568,048

R 38,607,400

R 41,110,000

R 7,957,000

R 5,122,000

R 12,418,125

R 4,299,000

R 7,500,000

R 2,950,000

R 2,513,250

R 0

R 5,268,000

R 7,587,210

R 3,659,400

R 7,924,990

R 4,804,050

R 6,399,506

R 5,771,000

R 4,543,000

R 0

R 9,190,500

R 2,420,000

R 1,858,000

R 11,204,000

R 16,359,190

R 16,769,500

R 12,736,260

R 8,400,400

R 23,630,600

R 0

R 0

R 0

R 0

R 0

R 0

R 0

R 4,202,563

R 531,540

R 0

R 320,000

R 0

R 0

R 0

R 0

R 0

R 0

R 0

R 13,356,200

R 6,787,050

R 3,812,500

R 1,200,000

R 1,140,000

R 7,306,000

R 6,520,100

R 5,500,000

R 15,250,000

R 7,490,000

R 0

R 13,527,000

R 3,980,000

R 2,594,100

R 3,134,982

R 5,231,000

R 1,160,000

R 5,671,200

R 1,802,000

R 3,858,200

R 4,141,800

R 2,863,582

R 1,125,458

R 8,102,500

R 9,940,350

R 7,741,000

R 1,071,950

R 8,842,400

R 8,022,525

R 13,974,300

R 0

R 0

R 0

R 0

R 0

R 250,000

R 2,879,500

R 4,473,500

R 2,228,240

R 457,600

R 1,103,000

R 29,625,400

R 10,478,400

R 2,414,666

R 4,990,500

R 3,368,000

R 7,560,500

R 0

R 4,758,300

R 15,885,150

R 8,923,345

R 4,704,000

R 9,564,965

R 11,301,520

R 13,275,500

R 3,630,000

R 2,052,000

R 790,000

R 4,155,000

R 5,179,000

R 19,534,103

R 16,001,707

R 18,775,300

R 9,138,400

R 12,433,375

R 48,112,800

R 0

R 0

R 0

R 0

R 0

R 346,500

R 822,620

R 870,000

R 1,331,000

R 138,000

R 0

R 127,500

R 0

R 0

R 0

R 0

R 0

R 0

R 18,564,410

R 3,748,000

R 1,172,400

R 11,166,122

R 6,453,250

R 15,723,700

R 5,510,000

R 19,007,953

R 10,574,500

R 11,966,200

R 10,465,000

R 18,461,306

New Loans by LendereMalahleni, 2008 - 2013The value of new bonds by lender by suburb over time

2013

eMalahleni Ext

16

2008

2009

2010

2011

2012

2013

eMalahleni Ext

41

2008

2009

2010

2011

2012

2013

eMalahleni NU 2008

2009

2010

2011

2012

2013

Emavaga 2008

2009

2010

2011

2012

2013

Ferrobank SP 2008

2009

2010

2011

2012

2013

Fransville 2008

2009

2010

2011

2012

2013

Ga-Nala SP 2008

2009

2010

2011

2012

2013

Heuwelfontein

SH

2008

2009

2010

2011

2012

2013

Highveld Park 2008

2009

2010

2011

2012

2013

Hlalanikahle

Ext 1

2008

2009

2010

2011

2012

2013

Hlalanikahle

Ext 2

2008

2009

2010

2011

2012

2013

Hlalanikahle

SP

2008

2009

2010

2011

2012

2013

Jackaroo AH 2008

2009

2010

2011

2012

2013

Jackaroo Park 2008

2009

2010

2011

2012

2013

Klarinet 2008

2009

2010

2011

2012

2013

KwaGuqa Ext 4 2008

R 0

R 0

R 0

R 0

R 0

R 0

R 4,766,000

R 13,908,000

R 18,931,000

R 13,700,000

R 12,885,000

R 200,000

R 0

R 0

R 0

R 0

R 0

R 0

R 0

R 0

R 0

R 0

R 0

R 0

R 7,359,000

R 3,927,000

R 9,034,467

R 7,470,000

R 4,615,000

R 2,690,000

R 0

R 0

R 0

R 0

R 0

R 0

R 29,852,800

R 21,747,165

R 33,920,000

R 54,344,000

R 24,933,509

R 5,170,000

R 0

R 15,270,000

R 9,110,000

R 6,650,000

R 3,100,000

R 3,018,924

R 0

R 0

R 0

R 0

R 0

R 0

R 1,720,000

R 1,050,000

R 0

R 0

R 0

R 0

R 7,580,000

R 7,576,000

R 9,330,000

R 16,920,000

R 10,031,601

R 2,010,000

R 1,750,000

R 2,460,000

R 2,230,000

R 2,390,000

R 1,840,000

R 0

R 4,800,000

R 0

R 0

R 0

R 0

R 0

R 435,000

R 7,993,330

R 12,708,358

R 4,784,800

R 8,713,512

R 14,644,253

R 36,189,140

R 0

R 0

R 0

R 0

R 0

R 0

R 0

R 0

R 0

R 0

R 0

R 60,000

R 0

R 0

R 0

R 0

R 0

R 0

R 0

R 0

R 0

R 0

R 0

R 0

R 2,660,000

R 8,216,400

R 6,751,500

R 10,584,800

R 4,555,000

R 5,562,850

R 0

R 0

R 0

R 0

R 0

R 0

R 18,192,837

R 19,481,500

R 18,595,850

R 21,023,500

R 5,857,500

R 25,507,400

R 716,000

R 5,818,000

R 4,625,000

R 8,887,100

R 8,500,000

R 2,665,000

R 0

R 0

R 0

R 0

R 0

R 0

R 0

R 0

R 0

R 0

R 0

R 0

R 9,265,724

R 5,495,620

R 0

R 0

R 0

R 0

R 9,255,500

R 9,020,000

R 13,199,500

R 6,497,300

R 4,924,599

R 13,584,253

R 2,687,000

R 3,490,000

R 2,449,000

R 1,697,000

R 0

R 3,415,000

R 7,720,000

R 0

R 0

R 0

R 0

R 0

R 0

R 1,482,400

R 1,607,400

R 1,471,889

R 0

R 7,959,871

R 14,321,240

R 0

R 0

R 0

R 0

R 0

R 0

R 1,250,000

R 3,471,400

R 4,629,466

R 5,916,046

R 4,862,052

R 4,364,040

R 0

R 0

R 0

R 0

R 0

R 0

R 1,292,700

R 716,700

R 613,802

R 2,479,183

R 8,363,069

R 16,492,790

R 4,373,400

R 0

R 3,210,000

R 5,868,871

R 6,422,900

R 1,999,200

R 0

R 0

R 0

R 0

R 0

R 0

R 0

R 1,445,497

R 0

R 0

R 0

R 0

R 1,584,512

R 3,351,000

R 1,593,823

R 4,666,972

R 5,469,918

R 11,843,733

R 0

R 1,386,400

R 0

R 1,243,233

R 0

R 1,257,398

R 4,361,700

R 0

R 0

R 0

R 0

R 0

R 0

R 5,712,000

R 0

R 0

R 3,787,000

R 7,995,000

R 17,306,253

R 0

R 0

R 0

R 0

R 0

R 0

R 5,671,725

R 5,895,000

R 4,402,500

R 2,727,000

R 2,185,000

R 4,680,000

R 0

R 0

R 0

R 0

R 0

R 0

R 7,801,640

R 5,625,000

R 3,664,000

R 4,930,500

R 4,816,500

R 17,939,456

R 3,518,000

R 3,296,000

R 7,757,590

R 1,300,000

R 0

R 8,463,000

R 0

R 0

R 0

R 0

R 0

R 0

R 16,379,505

R 11,498,293

R 0

R 0

R 0

R 0

R 7,324,600

R 2,439,000

R 3,178,000

R 2,564,500

R 4,024,500

R 6,969,400

R 0

R 1,100,000

R 0

R 244,000

R 702,000

R 700,000

R 2,289,000

R 0

R 0

R 0

R 0

R 0

R 0

R 1,078,500

R 2,341,420

R 208,000

R 2,307,500

R 27,527,296

R 64,866,624

R 0

R 0

R 0

R 0

R 0

R 0

R 3,834,000

R 5,738,000

R 760,000

R 4,123,000

R 5,464,000

R 3,529,900

R 0

R 0

R 0

R 0

R 0

R 0

R 12,776,500

R 4,583,000

R 3,077,000

R 8,948,250

R 11,157,000

R 14,721,900

R 3,279,000

R 880,000

R 5,379,000

R 15,708,500

R 0

R 10,480,000

R 0

R 0

R 0

R 0

R 0

R 0

R 1,057,676

R 371,431

R 0

R 0

R 0

R 0

R 4,635,600

R 8,901,000

R 4,307,500

R 5,736,200

R 4,677,600

R 7,533,000

R 2,637,000

R 0

R 711,000

R 1,240,000

R 400,000

R 0

R 3,980,000


35

2013

KwaGuqa Ext 4 2008

2009

2010

2011

2012

2013

KwaGuqa Ext 5 2008

2009

2010

2011

2012

2013

KwaGuqa Ext

10

2008

2009

2010

2011

2012

2013

KwaGuqa Ext

14

2008

2009

2010

2011

2012

2013

KwaGuqa Ext

18

2008

2009

2010

2011

2012

2013

KwaThomasM.. 2008

2009

2010

2011

2012

2013

Lehlaka Park 2008

2009

2010

2011

2012

2013

Lynnville 2008

2009

2010

2011

2012

2013

Model Park 2008

2009

2010

2011

2012

2013

New Stand 2008

2009

2010

2011

2012

2013

Ogies SP 2008

2009

2010

2011

2012

2013

Phola SP 2008

2009

2010

2011

2012

2013

Pine Ridge 2008

2009

2010

2011

2012

2013

Reno Ridge 2008

2009

2010

2011

2012

2013

River View 2008

2009

2010

2011

2012

2013

Schoongesicht 2008

R 26,216,975

R 6,037,800

R 16,676,250

R 10,050,000

R 12,963,009

R 0

R 48,627,220

R 41,956,464

R 56,041,000

R 55,906,188

R 50,112,949

R 13,486,394

R 0

R 630,000

R 0

R 380,000

R 380,000

R 540,000

R 450,000

R 1,539,498

R 2,110,000

R 1,225,000

R 246,900

R 929,571

R 0

R 0

R 0

R 634,000

R 840,000

R 214,000

R 14,540,000

R 22,305,331

R 40,805,552

R 29,866,104

R 11,755,610

R 3,590,000

R 0

R 0

R 0

R 0

R 700,000

R 60,000

R 390,000

R 0

R 0

R 0

R 0

R 0

R 2,172,000

R 4,868,000

R 2,450,000

R 350,000

R 2,860,000

R 119,700

R 500,000

R 320,000

R 2,180,000

R 2,450,000

R 1,236,750

R 0

R 1,700,000

R 2,770,000

R 3,266,000

R 1,424,000

R 1,955,000

R 875,000

R 1,550,000

R 1,840,000

R 0

R 1,158,955

R 0

R 0

R 0

R 1,384,000

R 720,000

R 1,200,000

R 1,604,600

R 1,079,460

R 1,000,000

R 2,250,000

R 4,420,000

R 3,938,088

R 2,450,000

R 313,596

R 0

R 21,538,100

R 9,313,400

R 9,228,500

R 2,136,000

R 2,679,500

R 1,395,450

R 37,289,700

R 42,491,680

R 39,942,600

R 36,736,740

R 22,689,300

R 67,029,740

R 2,454,500

R 1,718,310

R 1,055,824

R 600,000

R 680,000

R 2,679,609

R 1,764,000

R 540,000

R 987,180

R 0

R 140,000

R 2,506,000

R 962,500

R 683,000

R 570,000

R 0

R 570,000

R 330,000

R 0

R 0

R 0

R 0

R 0

R 70,000

R 12,637,600

R 28,605,300

R 36,110,400

R 11,869,734

R 14,038,089

R 30,697,150

R 750,000

R 910,000

R 583,200

R 0

R 0

R 470,000

R 270,000

R 1,323,000

R 279,000

R 100,000

R 0

R 0

R 490,000

R 1,039,500

R 2,462,800

R 556,500

R 888,000

R 918,000

R 2,899,500

R 1,023,000

R 1,993,500

R 220,000

R 600,000

R 609,553

R 5,242,400

R 2,151,500

R 3,575,300

R 4,918,680

R 1,222,500

R 3,419,553

R 2,895,800

R 811,000

R 2,021,500

R 1,168,000

R 985,000

R 1,410,000

R 3,230,400

R 1,959,000

R 1,679,000

R 971,545

R 200,000

R 2,007,200

R 4,025,000

R 3,194,000

R 1,762,000

R 2,276,680

R 700,000

R 4,281,616

R 0

R 6,291,700

R 2,506,000

R 2,771,300

R 10,777,619

R 4,129,698

R 5,427,370

R 15,072,075

R 15,196,700

R 6,229,105

R 13,928,361

R 39,850,368

R 46,397,212

R 650,000

R 0

R 680,700

R 0

R 0

R 1,526,993

R 0

R 381,700

R 501,025

R 1,128,920

R 934,576

R 884,233

R 0

R 0

R 0

R 0

R 0

R 324,000

R 10,332,000

R 12,211,430

R 15,012,077

R 19,085,524

R 9,586,450

R 13,485,576

R 0

R 0

R 600,000

R 254,864

R 446,764

R 0

R 370,000

R 0

R 0

R 0

R 242,508

R 471,580

R 955,700

R 555,700

R 0

R 921,370

R 490,000

R 799,227

R 0

R 300,510

R 0

R 1,054,201

R 194,400

R 1,802,839

R 660,000

R 1,603,400

R 769,712

R 1,515,279

R 2,790,840

R 5,506,017

R 0

R 431,923

R 579,850

R 960,887

R 1,098,337

R 3,325,172

R 350,000

R 0

R 255,151

R 1,287,316

R 418,301

R 669,366

R 0

R 0

R 320,000

R 1,703,209

R 2,448,508

R 3,536,596

R 0

R 14,188,850

R 0

R 650,250

R 0

R 2,083,500

R 3,950,500

R 20,974,112

R 15,250,250

R 15,812,750

R 12,212,550

R 22,879,000

R 61,789,660

R 0

R 0

R 0

R 0

R 0

R 540,000

R 350,000

R 350,000

R 300,000

R 220,000

R 550,000

R 387,198

R 0

R 0

R 300,000

R 79,208

R 0

R 1,124,000

R 8,750,750

R 7,202,000

R 6,958,000

R 8,202,500

R 6,664,906

R 27,949,000

R 0

R 0

R 0

R 0

R 231,000

R 254,725

R 0

R 370,000

R 0

R 0

R 417,500

R 1,356,000

R 0

R 0

R 0

R 0

R 250,000

R 384,000

R 200,000

R 570,000

R 0

R 0

R 0

R 482,736

R 400,000

R 960,000

R 1,207,000

R 890,000

R 0

R 2,588,129

R 260,000

R 230,000

R 0

R 1,090,461

R 901,000

R 237,849

R 200,000

R 0

R 625,000

R 355,000

R 635,000

R 576,000

R 280,000

R 0

R 0

R 1,570,000

R 275,000

R 1,496,600

R 0

R 16,969,610

R 3,898,000

R 1,167,000

R 1,285,000

R 3,881,750

R 7,783,000

R 16,144,744

R 14,201,400

R 14,568,400

R 25,494,765

R 33,813,400

R 82,966,500

R 932,000

R 1,215,000

R 1,380,000

R 92,000

R 886,500

R 2,954,000

R 320,000

R 390,000

R 698,000

R 435,000

R 219,400

R 1,447,000

R 0

R 0

R 0

R 0

R 300,000

R 600,000

R 11,259,700

R 4,773,293

R 7,716,000

R 14,368,550

R 8,060,016

R 33,334,100

R 315,000

R 840,000

R 0

R 1,231,000

R 0

R 47,000

R 0

R 0

R 340,000

R 0

R 0

R 819,000

R 1,405,000

R 0

R 585,000

R 450,500

R 1,108,100

R 1,332,000

R 0

R 1,020,500

R 230,000

R 1,479,700

R 1,377,000

R 2,254,000

R 0

R 646,500

R 2,228,700

R 1,676,000

R 2,917,000

R 8,329,500

R 633,000

R 975,000

R 771,400

R 705,000

R 1,193,000

R 3,265,000

R 435,000

R 879,250

R 1,203,000

R 234,000

R 511,000

R 2,592,000

R 928,300

R 382,500

R 1,730,000

R 779,000

R 1,446,000

R 3,513,177

R 0

Schoongesicht 2008

2009

2010

2011

2012

2013

Seekoei SH 2008

2009

2010

2011

2012

2013

Tasbet Park 2008

2009

2010

2011

2012

2013

Tasbet Park

Ext 1

2008

2009

2010

2011

2012

2013

Tasbet Park

Ext 2

2008

2009

2010

2011

2012

2013

Tasbet Park

Ext 3

2008

2009

2010

2011

2012

2013

Thubelihle SP 2008

2009

2010

2011

2012

2013

Thushanang 2008

2009

2010

2011

2012

2013

Tycoon 2008

2009

2010

2011

2012

2013

Valley Glen 2008

2009

2010

2011

2012

2013

Vosman SP 2008

2009

2010

2011

2012

2013

Wilge SP 2008

2009

2010

2011

2012

2013 R 0

R 3,796,000

R 2,050,000

R 0

R 450,000

R 2,073,107

R 0

R 0

R 0

R 0

R 0

R 0

R 2,490,000

R 1,680,000

R 2,670,000

R 2,730,000

R 1,395,000

R 0

R 0

R 566,000

R 2,194,000

R 460,000

R 0

R 1,065,000

R 0

R 0

R 930,000

R 0

R 0

R 0

R 0

R 0

R 0

R 750,000

R 0

R 0

R 8,200,000

R 4,210,000

R 7,834,615

R 5,340,000

R 1,457,000

R 0

R 10,120,000

R 4,850,000

R 13,130,000

R 8,190,000

R 7,217,740

R 540,000

R 5,801,000

R 8,275,000

R 6,411,500

R 7,400,000

R 5,253,000

R 2,200,000

R 0

R 0

R 0

R 0

R 500,000

R 0

R 0

R 0

R 0

R 0

R 0

R 0

R 0

R 0

R 3,025,000

R 550,000

R 0

R 0

R 26,216,975

R 0

R 0

R 405,000

R 441,000

R 0

R 162,500

R 3,879,000

R 3,776,000

R 2,793,000

R 5,051,700

R 2,581,000

R 2,945,000

R 0

R 486,000

R 862,000

R 300,000

R 350,000

R 1,112,600

R 0

R 0

R 0

R 0

R 0

R 0

R 0

R 300,000

R 0

R 0

R 0

R 0

R 2,438,000

R 5,068,000

R 3,805,100

R 3,447,000

R 480,000

R 3,199,600

R 3,166,000

R 7,216,500

R 10,543,391

R 4,765,500

R 2,234,000

R 7,298,100

R 2,671,000

R 4,610,000

R 2,961,700

R 1,832,400

R 963,000

R 1,663,000

R 0

R 0

R 145,435

R 1,040,000

R 0

R 922,400

R 0

R 0

R 0

R 0

R 0

R 0

R 630,000

R 0

R 1,095,300

R 225,000

R 250,000

R 2,764,000

R 0

R 0

R 0

R 0

R 0

R 0

R 2,104,400

R 550,000

R 408,910

R 1,353,205

R 2,265,562

R 3,915,325

R 0

R 387,000

R 0

R 505,196

R 0

R 467,469

R 0

R 0

R 0

R 0

R 0

R 0

R 0

R 0

R 0

R 0

R 0

R 0

R 0

R 454,731

R 0

R 1,403,931

R 794,115

R 540,000

R 3,060,700

R 1,705,400

R 520,000

R 2,053,500

R 1,009,796

R 6,066,851

R 3,057,100

R 1,235,700

R 0

R 2,436,467

R 3,105,658

R 4,908,513

R 0

R 0

R 137,807

R 0

R 0

R 0

R 0

R 0

R 0

R 0

R 0

R 0

R 0

R 0

R 0

R 399,849

R 363,192

R 0

R 0

R 0

R 0

R 0

R 0

R 0

R 779,000

R 0

R 522,500

R 0

R 0

R 750,000

R 0

R 0

R 0

R 200,000

R 0

R 304,357

R 0

R 0

R 0

R 0

R 0

R 0

R 0

R 0

R 0

R 205,000

R 120,000

R 0

R 75,000

R 0

R 680,000

R 0

R 0

R 2,349,400

R 1,008,000

R 1,350,000

R 270,000

R 797,000

R 996,500

R 7,809,000

R 980,000

R 810,000

R 500,000

R 420,750

R 0

R 4,828,000

R 0

R 0

R 0

R 0

R 0

R 600,000

R 0

R 0

R 0

R 0

R 0

R 0

R 0

R 0

R 0

R 0

R 0

R 297,000

R 14,188,850

R 0

R 0

R 84,000

R 544,000

R 250,000

R 435,000

R 924,000

R 826,200

R 0

R 0

R 1,840,000

R 2,270,000

R 279,000

R 0

R 425,000

R 246,500

R 570,200

R 0

R 0

R 0

R 0

R 0

R 0

R 120,000

R 0

R 755,000

R 0

R 0

R 0

R 400,000

R 1,670,000

R 405,000

R 0

R 0

R 615,000

R 598,000

R 3,304,700

R 5,606,500

R 1,753,000

R 1,290,000

R 1,410,000

R 7,174,000

R 3,381,500

R 2,724,750

R 2,032,000

R 846,250

R 1,767,500

R 4,334,500

R 0

R 0

R 535,500

R 0

R 0

R 0

R 0

R 0

R 0

R 0

R 0

R 0

R 300,000

R 515,000

R 500,000

R 541,000

R 318,600

R 1,050,000

R 16,969,610

Banks

ABSA

FNB

Nedbank

Standard Bank

Other Lenders

Source: South African Deeds Registry via Lightstone (Pty) Ltd, 2015. All indicators reflect formal market data as reflected onthe deeds registry.


36

12. Leverage

12.1 Key Findings

The presence of older RDP units within the municipality represent an important opportunity to leverage that investment in affordable housing in the years ahead, as owners seek to sell and move up the housing continuum, if opportunities are positioned properly. About 24% of all registered properties in eMalahleni were sponsored by the Government. The value of these homes if sold in the private market can be applied towards the cost of a new home.

This situation can be used to drive developers to build more gap housing, and financiers to finance RDP acquisition loans. eMalahleni is among the top five municipalities with the highest equity for properties under R500 000, the high level of equity may be closely related to the high number of Government-sponsored units.


Policies should focus on enticing developers to build more housing in the gap market, and encourage lending to the RDP and other lower cost home markets. Sites could be prioritised, which connect these RDP neighbourhoods to other more active housing markets to encourage mixed-income development.

To encourage an increase in the supply of gap housing, Government can unlock sites, supply infrastructure or grants, or hook-up fee discounts. Government can also reduce the cost of construction finance, which can all be passed down to the buyers in the form of lower sales prices.

Government can create programmes using funds pooled from a range of Government and private sector partners, which provide bonds for small properties, and offset risks through loan guarantees, loan loss reserves, and interest rate discounts. Funds can also organise to implement homebuyer counselling, debt consolidation and moderate rehab costs of the existing home to ensure loan performance of the portfolio.

These programmes would work together in the mining towns to create better social, housing and economic integration.


Leverage: the ability to use the percentage of the property that has been paid off as a down payment for another property.

Equity: the value of the residential property less the outstanding balance of the bond. This represents the value of ownership built up in a property, and is often used as the down payment for the owner’s next house purchased up the housing ladder.


37

12.4 Equity Fills the Gap

Equity is the value of one’s home less the amount owed to the lender. The chart shows the average equity per suburb (the green bar) compared to the average sales price per suburb. This helps to show what portion of the sales price might be paid for by the homeowners’ equity. If a homeowner in KwaGuqa wished to purchase a home in Jackaroo Park, they could sell their home and apply it towards the cost of the new home, reducing the amount they would have to borrow. Instead of borrowing over R507 000 (the average sales price), they would only need about R350 000 (the orange bar in Jackaroo Park minus the green bar in KwaGuqa Ext 4). Thus, equity makes homeownership in higher-priced neighbourhoods affordable, expanding housing options. Equity closes the housing gap for less affluent homeowners because their properties are less likely to have a bond, and those markets have experienced more appreciation of value. It is important to consider this value in addition to a homeowner’s income.

Equity invested by homeowners also reduces risk by increasing their financial stake in their home. This is the same way upper-income families move up the housing continuum, and is now available at scale for lower-income families, thanks to the massive Government investment in homes for the poor. This requires financing for the lower income buyers, something to explore with lender partners.

While averages in such diverse housing markets are hard to consider meaningfully, the picture does indicate that purchasing power increases (and gaps close) when equity is taken into consideration.

R 0K R 200K R 400K R 600K R 800K R 1 000K R 1 200K R 1 400K R 1 600K R 1 800K R 2 000K

Avg Sales Price

Bankenveld Estate

Ben Fleur

Buffer Zone

Clewer SP

Dark City

Del Judor Ext 4

Die Heuwel

Dixon AH

Doornpoort SH

Duvha Park

Emaforumini

eMalahleni Central

eMalahleni Ext 8

eMalahleni Ext 10

eMalahleni Ext 16

eMalahleni Ext 41

eMalahleni NU

Emavaga

Emsagweni

Ferrobank SP

Fransville

Ga-Nala SP

Heuwelfontein SH

Highveld Park

Hlalanikahle Ext 1

Hlalanikahle Ext 2

Hlalanikahle Ext 3

Hlalanikahle SP

Jackaroo AH

Jackaroo Park

Klarinet

KwaGuqa Ext 4

KwaGuqa Ext 5

KwaGuqa Ext 10

KwaGuqa Ext 14

KwaGuqa Ext 18


Lehlaka Park

Lynnville

Model Park

New Largo SP

New Stand

Ogies SP

Oyco

Paxton SP

Phola SP

Pine Ridge

Reno Ridge

River View

Schoongesicht

Seekoei SH

Siyabonga

Skoongesig SP

Tasbet Park

Tasbet Park Ext 1

Tasbet Park Ext 2

Tasbet Park Ext 3

Thubelihle SP

Thushanang

Tycoon

Valley Glen

Vezibuhle

Vosman Ext 17

Vosman SP

Wilge SP

Witbank Dam Resort

R 20K

R 114K

R 134K

R 25K

R 315K

R 175K

R 365K

R 310K

R 206K

R 203K

R 259K

R 267K

R 249K

R 266K

R 593K

R 227K

R 1 600K

R 89K

R 39K

R 1 102K

R 1 431K

R 1 066K

R 1 259K

R 625K

R 680K

R 851K

R 808K

R 850K

R 937K

R 817K

R 799K

R 714K

R 801K

R 726K

R 904K

R 992K

R 527K

R 734K

R 682K

R 509K

R 501K

R 402K

R 136K

R 460K

R 123K

R 458K

R 666K

R 60K

R 50K

R 30K

R 295K

R 58K

R 1 048K

R 1 303K

R 1 865K

R 1 756K

R 1 657K

R 415K

R 270K

R 506K

R 301K

R 566K

R 173K

R 534K

R 675K

R 618K

R 281K

R 492K

R 422K

R 674K

R 755K

R 468K

R 517K

R 515K

R 756K

R 206K

R 479K

R 578K

R 461K

R 119K

R 343K

R 599K

R 220K

R 248K

R 215K

R 276K

R 295K

R 249K

R 263K

R 415K

R 388K

R 214K

R 369K

R 205K

R 377K

R 347K

R 255K

R 404K

R 176K

R 283K

R 72K

R 69K

R 85K

R 93K

Average Equity to Average Sales PriceeMalahleni, 2013The value of average home equity related to the average sales price

Measure Names

Avg Sales Price

Avg Value of Residential Equity



38

12.5 Accessing Equity closes the Housing Gap and can Drive Demand

Understanding the difference in equity growth rates on a map allows a better understanding of which property markets can be leveraged to support more new development. Many higher priced areas have experienced modest equity growth (grey areas) or loss (red areas) over the past five years. This may be due to increasing sales prices (rather than amortization as new buyers tend to have less equity, and this market has been very active recently). The greatest equity growth over five years (green areas and green lines) has been in less developed areas with fewer sales, and values have accrued to the existing homeowners. Homes worth less than R500 000 typically have fewer loans, a faster-growing value, and an initial housing cost that was low or free (thanks to government investment in housing). In 2013, the equity in affordable properties (green line) was approximately 6% higher than all properties (red line). Homebuyers can reduce the amount they have to borrow through savings or the equity in their home, if they have an existing house which they can sell. This lowers their monthly payment or increases the price they can afford. Leverage is the practice of using this equity to increase their housing affordability. This indicator thus becomes very useful for meeting, and closing, the housing gap.

Constraints to using leverage in affordable housing markets include: the availability of credit for potential buyers to pay the full value of the house; maximising the equity available to the homeowner, the availability of homes up the housing ladder to buy, and in the case of RDP owners and the ability to sell Government subsidised stock (which comes with an eight-year resale restriction). Other constraints include household indebtedness, and the willingness of existing homeowners to sell their most important asset.

However, policies which address these constraints can expand the housing ladder in remarkably quick and cost-effective ways. Closing cost assistance, interest rate write downs, and loan loss funds all cost a fraction of new construction, and put the opportunity (and choice) in the hands of the homeowner, rather than the Government.

New Largo SP

KwaGuqa Ext 14

KwaGuqa Ext 10

Bankenveld Estate

Jackaroo Park

eMalahleni Ext 41

River ViewFerrobank SPHlalanikahle SP

Ga-Nala SP

Thubelihle SP

Lehlaka Park

Ogies SP

Emaforumini

Wilge SP

Heuwelfontein SH

eMalahleni NU

Clewer SP

Schoongesicht

Duvha Park

Tasbet Park Ext 2

Valley GlenKlarinet

5 Year Equity GrowtheMalahleni, 2013Rates of equity growth, since 2007 to 2013

-25,74% 59,45%

Avg value of EquityTotal Residential properties

0

1 000

2 000

≥ 3 000

Source: Stats SA Census, 2011, South African Deeds Registry via Lightstone (Pty) Ltd, 2015. All indicators re-

flect formal market data as reflected on the deeds registry.

2008 2009 2010 2011 2012 2013

0%

10%

20%

30%

40%

Ch

an

ge

in

Va

lue

of

Re

sid

en

tia

l E

qu

ity

21%

14%

41%

30%

0%

4%

17%

11%

35%

25%

0%

4%

Growth in Equity eMalahleni, 2008 - 2013The change in the value of average home equity from

2008

Measure Names

Affordable properties (under R500 000)

All residential properties

Source: SA Deeds Registry via Lightstone (Pty) Ltd., 2015. All indicatorsreflect formal market data as reflected on the deeds registry.


39

13. Affordability Profile

13.1 Key Findings

eMalahleni’s average household income is above-average, when compared to other municipalities included in the mining town profiles, its affordability ratio of 1.97 is below the mining town average of 2.8. Despite an above-average monthly income, there remain large disparities among incomes and affordable housing access in certain areas within the municipality. In some areas, sales prices used to determine affordability are very low, probably the result of lack of credit access, forcing sellers to sell for whatever cash might be offered regardless of how much the house may be worth.


Affordability constraints can be addressed through housing strategies and solutions, which propose creative financing tools and techniques can reduce financial barriers (such as down payment assistance, interest rates and principal requirements) as well as unlocking equity, rather than simply trying to push costs down.

Lowering the cost of financing can also increase the amount that can be borrowed, which can increase sales prices and the amount of equity a home seller will be able to access to buy their next home.

Lack of adequate affordable supply in areas with very low incomes can often be quickly addressed through the careful considered provision of well-located quality rental housing.


Affordability: affordability is generally defined as the ability to allocate less than 25-30% of a household’s monthly income towards housing costs. While upper income families’ income enables them to cover the cost of producing and selling a housing unit and thus provides many housing options, lower income families struggle because their income often does not adequately cover the cost of producing and selling a housing unit. Supply is limited and others must collaborate to provide decent affordable housing.

Affordability Ratio: the purchasing power of local incomes to afford local sales prices. The local average sales price is divided by the target house price. This shows the relationship between local incomes and local sales prices – a larger number means that local sales prices are harder for local incomes to afford, implying a mismatch between local housing options and residents. Housing Gap: the shortfall between the target house price a household can afford and the sales price (or construction cost) of a house. This can be calculated by the difference between the target affordable price and the cost or price of the house.

Target House Price: the sales price affordable to local households, which is calculated using the average area median income available for housing (25% of monthly income) using standard underwriting criteria (typically 20 year amortization at 11%, with 5% down).


40

13.4 Affordability

Actual affordability relies on understanding local household income to determine what is reasonably afforded by existing residents, how much of a gap exists and what is required to ensure more realistic affordability. The Affordability Ratio is determined by dividing the purchase price affordable to the average household income by the average sales price. Nationally, it takes three times the average income to afford the average sales price. This doesn’t mean that families are paying that, it means that most homes on the deeds registry are not affordable to the majority of South Africans. But this indicator provides an important benchmark, by providing a degree of affordability. We can measure that disparity at the local level as an indicator of how well local markets might be catering to local residents.

In eMalahleni, some formal markets appear more affordable to local residents, creating the potential for a fairly stable formal housing market. Some areas have very high gaps, perhaps the result of more recent higher-priced housing development.

Introducing new products or strategies are more likely to be sustainable if they are responsive to current residents. The target home price in column 2 can also be compared to estimated potential per-unit construction costs to determine the amount of subsidy which may be required to build and sell the units to local residents.

Subplace NameAvg Monthly

Income

Target house

price

Average

Sales Price

Affordable

Price Gap

Affordability

Ratio

Bankenveld Estate

Ben Fleur

Buffer Zone

Clewer SP

Dark City

Del Judor Ext 4

Die Heuwel

Dixon AH

Doornpoort SH

Duvha Park

Emaforumini

eMalahleni Central

eMalahleni Ext 8

eMalahleni Ext 10

eMalahleni Ext 16

eMalahleni Ext 41

eMalahleni NU

Emavaga

Emsagweni

Ferrobank SP

Fransville

Ga-Nala SP

Heuwelfontein SH

Highveld Park

Hlalanikahle Ext 1

Hlalanikahle Ext 2

Hlalanikahle Ext 3

Hlalanikahle SP

Jackaroo AH

Jackaroo Park

Klarinet

KwaGuqa Ext 4

KwaGuqa Ext 5 0.8

0.9

0.7

0.8

0.3

0.5

0.9

1.1

1.0

0.8

1.6

1.6

1.3

1.2

2.6

0.2

0.7

0.6

0.8

0.6

1.1

0.8

0.7

0.7

0.7

R 62K

R 39K

R 40K

R 140K

R 93K

R 50K

R 82K

R -71K

R 9K

R 49K

R -285K

R -297K

R -222K

R -108K

R -507K

R 130K

R 222K

R 578K

R 132K

R 451K

R -52K

R 32K

R 67K

R 352K

R 531K

R 259K

R 267K

R 89K

R 527K

R 39K

R 60K

R 1,102K

R 666K

R 1,431K

R 175K

R 801K

R 799K

R 937K

R 714K

R 817K

R 30K

R 501K

R 992K

R 509K

R 808K

R 1,066K

R 123K

R 136K

R 904K

R 1,259K

R 322K

R 306K

R 129K

R 667K

R 375K

R 132K

R 127K

R 137K

R 110K

R 1,184K

R 184K

R 594K

R 1,440K

R 149K

R 80K

R 109K

R 224K

R 516K

R 502K

R 714K

R 607K

R 309K

R 160K

R 723K

R 1,570K

R 641K

R 1,259K

R 1,014K

R 155K

R 202K

R 110K

R 1,256K

R 1,790K

R 12K

R 12K

R 5K

R 25K

R 14K

R 5K

R 5K

R 5K

R 4K

R 45K

R 7K

R 23K

R 55K

R 6K

R 3K

R 4K

R 9K

R 20K

R 19K

R 27K

R 23K

R 12K

R 6K

R 27K

R 59K

R 24K

R 48K

R 38K

R 6K

R 8K

R 4K

R 48K

R 68K

Mind the Gap TableeMalahleni, 2013Affordability indicators per suburb

KwaGuqa Ext 10

KwaGuqa Ext 14

KwaGuqa Ext 18


Lehlaka Park

Lynnville

Model Park

New Largo SP

New Stand

Ogies SP

Oyco

Paxton SP

Phola SP

Pine Ridge

Reno Ridge

River View

Schoongesicht

Seekoei SH

Siyabonga

Skoongesig SP

Tasbet Park

Tasbet Park Ext 1

Tasbet Park Ext 2

Tasbet Park Ext 3

Thubelihle SP

Thushanang

Tycoon

Valley Glen

Vezibuhle

Vosman Ext 17

Vosman SP

Wilge SP

Witbank Dam Resort

0.4

1.8

0.2

0.8

1.3

0.9

0.5

1.7

0.9

0.7

0.8

1.8

2.0

1.9

0.2

0.9

1.0

0.6

2.1

1.0

0.9

1.4

R 195K

R -88K

R 110K

R 115K

R -175K

R 63K

R 266K

R -652K

R 17K

R 259K

R 204K

R -282K

R -160K

R -221K

R 98K

R 149K

R 6K

R 68K

R -211K

R 4K

R 41K

R -82K

R 460K

R 50K

R 851K

R 134K

R 203K

R 20K

R 593K

R 734K

R 682K

R 227K

R 1,600K

R 310K

R 680K

R 726K

R 625K

R 315K

R 458K

R 25K

R 850K

R 206K

R 114K

R 402K

R 249K

R 365K

R 266K

R 328K

R 115K

R 130K

R 709K

R 559K

R 745K

R 493K

R 74K

R 75K

R 948K

R 327K

R 939K

R 930K

R 343K

R 155K

R 558K

R 84K

R 237K

R 123K

R 66K

R 1,000K

R 211K

R 182K

R 191K

R 253K

R 407K

R 184K

R 12K

R 4K

R 5K

R 27K

R 21K

R 28K

R 19K

R 3K

R 3K

R 36K

R 12K

R 36K

R 35K

R 13K

R 6K

R 21K

R 3K

R 9K

R 5K

R 2K

R 38K

R 8K

R 7K

R 7K

R 10K

R 15K

R 7K

Source: StatsSA Census 2011 (with CPI increase); South African Deeds Registry via Lightstone (Pty) Ltd, 2015. All indicators reflect formal market data as

reflected on the deeds registry.


41

13.5 Mind the Gap

This chart is identical to the previous chart but shows bar lines to better visualise differences across the area. These tables measure relative affordability for each suburb in the target area in three ways: starting with the average income (column 1), it calculates the average sales price affordable to the average family using standard underwriting terms (5% down, 11% for 20 years, up to 25% of household income, column 2). It compares that to the area’s average sales price (column 3). Column 4 (“Affordable Price Gap”) shows the difference between the average sales price and the local target (affordable) house price. Column 5 divides the two values to show the affordability ratio, the number of times it might take the local income to afford the local sales price. For example in Phola SP, it takes 2.03 times the average income to afford the average sales price.

In eMalahleni, the average income is about R13 300, the average target house price is R350 000 (price of house that income can afford), and the average sales price is R689 000. Thus, on average throughout the municipality it takes 1.97 times the average income to afford the average house. These very high level indicators are useful when comparing affordability, to see which areas are more or less affordable. This helps one to understand how housing strategies need to address affordability within the town, including what resources or policies might be required to help fill these gaps (i.e. affordable financing, buyer subsidies).

When affordability is an issue, perhaps equity of existing homeowners can help fund the gap. Policies will need to encourage the sale of lower cost homes that can allow housing purchases further upstream for lower income households.

R 20,0K R 40,0K

Avg Monthly HH income

R 0K R 3 000K

Target house price

R 1 000K

Avg Sales Price

R -1 000K R 0K R 1 000K

Affordable Price Gap

0,00 1,00 2,00 3,00

Affordability Ratio

Bankenveld Estate

Ben Fleur

Buffer Zone

Clewer SP

Dark City

Del Judor Ext 4

Die Heuwel

Dixon AH

Doornpoort SH

Duvha Park

Emaforumini

eMalahleni Central

eMalahleni Ext 8

eMalahleni Ext 10

eMalahleni Ext 16

eMalahleni Ext 41

eMalahleni NU

Emavaga

Emsagweni

Ferrobank SP

Fransville

Ga-Nala SP

Heuwelfontein SH

Highveld Park

Hlalanikahle Ext 1

Hlalanikahle Ext 2

Hlalanikahle Ext 3

Hlalanikahle SP

Jackaroo AH

Jackaroo Park

Klarinet

KwaGuqa Ext 4

KwaGuqa Ext 5

KwaGuqa Ext 10

KwaGuqa Ext 14

KwaGuqa Ext 18


Lehlaka Park

Lynnville

Model Park

New Largo SP

New Stand

Ogies SP

Oyco

Paxton SP

Phola SP

Pine Ridge

Reno Ridge

River View

Schoongesicht

Seekoei SH

Siyabonga

Skoongesig SP

Tasbet Park

Tasbet Park Ext 1

Tasbet Park Ext 2

Tasbet Park Ext 3

Thubelihle SP

Thushanang

Tycoon

Valley Glen

Vezibuhle

Vosman Ext 17

Vosman SP

Wilge SP

Witbank Dam Resort

R 68K

R 48K

R 25K

R 55K

R 23K

R 38K

R 48K

R 24K

R 59K

R 27K

R 12K

R 12K

R 23K

R 27K

R 19K

R 20K

R 45K

R 12K

R 14K

R 15K

R 10K

R 38K

R 21K

R 13K

R 35K

R 36K

R 12K

R 36K

R 19K

R 28K

R 21K

R 27K

R 12K

R 23K

R 10K

R 8K

R 7K

R 7K

R 8K

R 6K

R 2K

R 5K

R 9K

R 3K

R 6K

R 6K

R 9K

R 4K

R 3K

R 6K

R 7K

R 3K

R 3K

R 5K

R 5K

R 5K

R 5K

R 5K

R 4K

R 4K

R 7K

R 4K

R 4K

R 4K

R 4K

R 9K

R 1 790K

R 1 256K

R 1 570K

R 1 000K

R 1 184K

R 1 014K

R 1 259K

R 1 440K

R 110K

R 202K

R 155K

R 641K

R 723K

R 160K

R 309K

R 607K

R 714K

R 502K

R 516K

R 224K

R 109K

R 149K

R 594K

R 184K

R 110K

R 137K

R 127K

R 132K

R 375K

R 667K

R 129K

R 306K

R 322K

R 184K

R 407K

R 253K

R 191K

R 182K

R 211K

R 123K

R 237K

R 558K

R 155K

R 343K

R 930K

R 939K

R 327K

R 948K

R 493K

R 745K

R 559K

R 709K

R 130K

R 115K

R 328K

R 600K

R 118K

R 111K

R 113K

R 259K

R 234K

R 75K

R 74K

R 66K

R 84K

R 80K

R 1 259K

R 1 600K

R 1 102K

R 1 431K

R 1 066K

R 904K

R 136K

R 123K

R 808K

R 509K

R 992K

R 501K

R 134K

R 817K

R 714K

R 937K

R 799K

R 801K

R 175K

R 666K

R 851K

R 460K

R 527K

R 267K

R 259K

R 266K

R 365K

R 249K

R 402K

R 114K

R 206K

R 850K

R 458K

R 315K

R 625K

R 726K

R 680K

R 310K

R 227K

R 682K

R 734K

R 593K

R 203K

R 30K

R 60K

R 39K

R 89K

R 20K

R 50K

R 25K

R -222K

R -297K

R -285K

R -251K

R -175K

R -652K

R -201K

R -282K

R -160K

R -211K

R -507K

R -108K

R -221K

R 352K

R 110K

R 195K

R 115K

R 451K

R 531K

R 578K

R 222K

R 130K

R 132K

R 140K

R 259K

R 149K

R 204K

R 266K

R -52K

R -82K

R -71K

R -88K

R 67K

R 32K

R 98K

R 40K

R 93K

R 50K

R 41K

R 82K

R 17K

R 63K

R 62K

R 39K

R 68K

R 49K

R 61K

R 4K

R 9K

R 6K

0,85

1,05

1,55

0,55

0,95

0,15

0,45

0,79

0,79

0,79

0,69

0,19

0,69

1,18

1,59

0,78

0,99

0,99

0,78

1,78

1,69

0,67

0,97

0,63

0,63

0,93

0,87

1,93

2,03

1,77

0,46

0,70

1,44

0,90

0,20

0,84

0,64

2,64

0,30

0,92

1,82

0,72

1,42

1,12

0,72

2,11

1,31

1,31

0,81

0,41

Mind the Gap CharteMalahleni, 2013Affordability indicators per suburb

Source: StatsSA Census 2011 (with CPI increase); South African Deeds Registry via Lightstone (Pty) Ltd, 2015. All indicators reflect formal market data as reflected on the deeds registry.


42

13.6 Mapping Affordability

These maps show the importance of taking local household income, or purchasing power, into the understanding of affordability. The first map shows average sales prices by suburb, with the darker areas having higher prices. The second map shows the same area by affordability ratio, the darker areas (those with higher affordability ratios) showing a greater difference between suburb incomes and suburb sales prices. While some areas appear affordable by sales price (such as eMalahleni Ext. 10), they are not as affordable when considering local incomes (the darker green on the second map). These analyses do not take into account the indebtedness of potential buyers, an important factor in determining bond eligibility. Rental housing therefore, might be an important option towards providing well-located and professionally managed affordable housing in those areas.

The areas with no dots have no residential properties on the deeds registry – they are farms or open space, mines or informal settlements.

Pine Ridge

Phola SP

New Stand

New Largo SP

KwaGuqa Ext 14

KwaGuqa Ext 10

Hlalanikahle SP

Highveld Park

eMalahleni Ext 8Del Judor Ext 4

Bankenveld Estate

Wilge SP

Thubelihle SP

Tasbet Park Ext 2

Ogies SP

Lehlaka Park


Heuwelfontein SH

Ga-Nala SP

Ferrobank SP

eMalahleni NU

eMalahleni Ext 41

eMalahleni Ext 10

Duvha Park

Dark City

Buffer Zone

Ben Fleur

Suburbs by Average Property ValueeMalahleni, Suburbs by average sales price and number of properties, 2013

20 000 1 000 000

Avg Sales PriceTotal Residential properties

0

1 000

2 000

≥ 3 000

Source: Stats SA Census, 2011, South African Deeds Registry via Lightstone (Pty) Ltd, 2015. All indicators reflect formal marketdata as reflected on the deeds registry.


Bankenveld Estate

Hlalanikahle Ext 3Hlalanikahle Ext 2

Heuwelfontein SH

Tasbet Park Ext 3

eMalahleni Ext 10KwaGuqa Ext 18

eMalahleni NU

New Largo SP

Jackaroo Park

Thubelihle SP

Lehlaka Park

Jackaroo AH

Emaforumini

Ga-Nala SP

Valley Glen

Pine Ridge

New Stand

Clewer SP

Ogies SP

Affordable Suburbs by Affordability RatioeMalahleni, by suburb, 2013Relationship between average income and sales price (higher is less affordable)

0,15 3,00

Affordability RatioTotal Residential properties

0

1 000

2 000

3 363

Source: Centre for Affordable Housing Finance in Africa, with StatsSA Census 2011 (with CPI increase); South African DeedsRegistry via Lightstone (Pty) Ltd, 2015. All indicators reflect formal market data as reflected on the deeds registry.


43

14. Rental Index

14.1 Key Findings

According to the 2011 StatsSA census, 33% of households rent in eMalahleni, which is mid-range amongst the mining towns in the study of 31%.

The opportunity for rental housing development within eMalahleni is strong within specific areas. Those areas with greater density, modest incomes, and affordability challenges are more likely to support quality, professionally managed and affordable rental housing. Rental housing also provides flexibility to employers and workers as mining markets expand and contract from time to time.


Due to the cyclical, commodity and demand-driven nature of these towns’ primary industry, rental housing becomes a very important housing solution.

Rapidly changing housing demand driven by mining activities makes a strong case for prioritising quality rental housing. If rental housing is well-situated and convenient to transport and centrally located in dense areas, it can bring social and economic cohesion and vibrancy to housing markets over the longer term.

Densifying housing markets requires infrastructure upgrades and financial mechanisms which provide for long-term affordability and sustainability.


Rental Index: A tool used to measure the potential suitability of local areas for rental housing, as measured by a group of five indicators which support rental housing; including density, area median income; the affordability ratio and market growth as measured by the Housing Performance Index. A higher score implies greater success for rental housing.

Affordability Ratio: the purchasing power of local incomes to afford local sales prices. The local average sales price is divided by the target house price. This shows the relationship between local incomes and local sales prices – a larger number means that local sales prices are harder for local incomes to afford, implying a mismatch between local housing options and residents.

Area Median Income: the percentage of the average local income to the municipal average income, which allows for understanding the income relative to the market overall, and across many municipalities.

Housing Performance Index: the growth of the local suburb in six key housing market indicators as compared to the municipality growth. A higher number implies more growth.

Percent Households Renting: the number of surveyed households who rent divided by the total number of households, per StatsSA census 2011. This includes everything from bedrooms and backyard shacks to single family homes and sectional title units.

Population Density: the number of people per square hectare of the suburb, as provided by StatsSA.

Tenure: the terms under which land or buildings are held or occupied, e.g. rental, ownership etc.


44

14.4 Rental Housing: Driving an Affordable Housing Option

Rental housing is one of the most efficient and effective ways to provide affordable accommodation. In most South African towns, this means backyard shacks, an important but very inefficient means of housing under-housed families. While there exists a robust social housing sector targeting lower income families in multi-unit buildings, these are primarily in large metropolitan areas. Many private developers and investors are considering expanding significantly into the rental segment. If better understood and embraced, Government can meet housing backlogs quickly and affordably by promoting policies which target affordable rental housing, working closely with rental housing developers.

With security of tenure through a lease agreement, residents have assurance of quality property management, consistent utility access and can even build up their credit history with positive rent and utility accounts. Because owners of rental housing must locate their properties competitively to ensure monthly occupancy, rental housing provides affordable access to transport hubs, jobs and readily available community services, which might be priced out of the range of lower income families seeking to buy.

By bundling a set of housing market indicators, it is possible to start differentiating those places where a rental strategy might be well-suited. The map shows those areas with above-average densities, moderate incomes, and above-average households currently renting, all important factors when considering the placement and promotion of rental housing. In eMalahleni, the areas most suitable for renting include suburbs in close proximity along the N4 highway to Pretoria, and one suburb further south on the route to Johannesburg. Several conditions are crucial for the creation of successful and sustainable rental markets: density, high demand, and affordability. By using existing housing performance indicators, it is possible to prioritise the presence of those indicators intentionally to pick up those areas primed for rental housing. In order to sustain rental housing at scale, projects must be able to achieve density to keep costs down, and access ready markets, with good proximity to jobs, transport and educational opportunities to keep projects running smoothly. That appears to be the opportunity found within eMalahleni.

Rental Index Indicator

Method Implies Weight

Median Income50 - 80% area median income

Affordability 25%

Population Density Exceeds metro average Density 25%

Housing Performance Index

Growing Demand 20%

Percent Households Renting

Exceeds metro average Demand 15%

Affordability RatioRatio exceeds metro average

Affordability 15%

Wilge SP

Thubelihle SP

Pine Ridge

Ogies SP

Lehlaka Park

KlarinetHlalanikahle SP

Highveld Park

Ga-Nala SP

eMalahleni NUEmaforumini

Duvha Park

Clewer SP Bankenveld Estate

Lynnville

KwaGuqa Ext 18

Rental IndexEmalahleni, by suburb, 2013Those suburbs with a higher likelihood of rental demand

Rental Profile

High

Low

Number of Residential properties

0

1000

2000

3363

Source: South African Deeds Registry via Lightstone (Pty) Ltd, 2015. All indicators reflect formal market data as reflected onthe deeds registry.


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15. Key Concepts

The definitions of the concepts used in this profile are set out in alphabetical order below.

15.1 Affordable

Traditionally, affordable refers to housing or areas with prices or values below the overall market which target below-average incomes. It is often defined as R500 000 or less (but can be higher or lower depending on intent) because this is the amount that a household earning less than R16 000 on average can afford, the target limit of many Government subsidy schemes. Affordability is the relationship between the cost of housing (a mortgage bond payment or rent) and the income of the tenant or owner. Affordable housing is that which can be rented or purchased within certain constraints in this report, with a mortgage equal to 28% of the borrower’s income, at 11% over 20 years, with 5% of the sales price paid as down payment. Areas where the average income can afford the average sales price or more are considered affordable.

15.2 Affordability Ratio

This ratio measures relative affordability by comparing the AVERAGE sales price to the average income within the same area – higher ratios meaning less affordability. The average sales price is divided by the AFFORDABLE sales price, which is calculated as the present value of typical mortgage terms using 28% of the average income (95% of the average sale price, at 11% for 20 years). A ratio of 1 means that the average home price is exactly equal to the average household income. Ratios over 1 represent the number of times by which the average income must be increased to afford the average home.

15.3 Appreciation

The rate, or percent change over time between two values (most often price or value) is calculated by dividing the difference between the beginning and end values of the property in the timeframe by the beginning value. The result is the percent by which the property value or price changed. It is a valuable means of comparing the rate of change across very different property markets, areas or market sizes.

15.4 Average

The result obtained by adding several amounts together and then dividing this total by the number of amounts. For instance, average sales price is calculated by adding up all sales within an area and dividing this total by the total number of sales within an area. The average is useful for comparing and understanding different areas, market sizes, and property types.

15.5 Benchmark

An indicator that is calculated in the same way across a larger level (such as national or municipal levels) to compare with smaller areas (such as main places or suburbs). Benchmarks are useful for understanding the performance of housing markets because they provide a consistent means of comparing markets to each other and to larger areas. For example, local markets perceived as having modest appreciation rates may actually be growing quickly when compared with other areas, the metro or the country as a whole. Benchmarks are a key component of the Housing Performance Index, which uses them to determine whether local areas or metros are changing faster than; about the same as; or slower than the metros or the country.

15.6 Bonded Sale

A sales transaction transferring ownership of a property, which includes an associated mortgage bond used by the buyer to purchase that property and which the lender requires to be secured by that property. Bonded sales reflect lender investment in an area and perceptions of market strength and risk levels.


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15.7 Churn

This refers to the total number of homes sold within an area over a one-year period divided by the number of homes within that area. Similar to turnover, churn represents active market interest, a large pool of eligible buyers and willing sellers, and ready access to mortgage financing. In affordable areas, lower churn can reflect reduced housing mobility rather than less marketability, as the result of fewer upward housing options for potential sellers, and less access to bond financing for potential buyers. Other indicators (such as bond rates or types; loan to values; equity rates and income) can help differentiate marketability from pent-up market mobility.

15.8 Equity

The value of ownership interest in a property, primarily the current VALUE of a property minus the current value of any bonds or other claims on the property. Equity value grows as mortgage balances are paid down and property values increase. Equity is realised when a house is sold and is most often used to purchase another property, by either increasing the amount available to purchase or lowering monthly mortgage payments (or both). Individual circumstances within neighbourhoods may vary widely, but areas with higher aggregate levels of equity represent greater opportunity for upward mobility, both for existing residents who can sell and invest the equity in a new home and for lower income households able to purchase the existing home.

15.9 Equity Growth

The rate at which an owner or investor’s equity value has changed over time, calculated by dividing the difference between the values of equity at the beginning and end of the period by the beginning year’s equity value. Growth in equity (along with income levels) can be used to determine market potential, as equity significantly boosts the purchasing power of potential buyers. Circumstances that increase equity return include prices that appreciate faster than debt is paid down, less debt, and registrations of new properties with no debt.

15.10 Formal Housing Market

A formal housing market is an area where owners sell or otherwise transfer residential properties (which have been registered on the national title and deed registry) to willing buyers who become the legal owners of those properties. Housing markets also include residences that are rented, traded, bartered or otherwise swapped, or legally occupied. This report tracks formal housing markets, as it only uses actual sales reflected on the South African deeds registry. It is estimated that 25–50% of all properties in South Africa are not registered.

15.11 Government-sponsored housing

Housing which was created through some government intervention, from site and infrastructure provision, direct construction or finance, such as Site & Service, RDP and BNG. While these homes are not recorded as such on the deeds registry, their presence is estimated based on surrounding registrations, timing, prices, and volume of activity.

15.12 Housing Continuum

The housing continuum includes all ranges and options of housing, from temporary shelter and informal housing to the highest variety of housing ownership and occupancy models and prices. A continuum implies a continuous, connected marketplace of housing options, which serve the full range of conceivable housing demands as people’s lifestyles and life circumstances change over time. In reality, most housing markets are an uneven distribution of housing supply and housing demand.


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15.13 Leverage

Leverage is the practice of purchasing something by borrowing part of the total cost and is measured by the degree to which a buyer has borrowed funds to purchase a home. Also called gearing, leverage can be measured in several ways (such as loan to value or equity ratio), but all compare bond amounts to the housing value. Generally, homes or neighbourhoods that are highly leveraged are understood to be higher risk because owners lose less equity if they default. Areas with lower leverage rates are generally considered more attractive because lenders have less risk, while owners have more invested and have more potential EQUITY to invest in new housing options.

15.14 Market Segment

This refers to the aggregate of all properties within a certain rand value. Properties are aggregated by their VALUE to better understand the unique dynamics of these market segments. Values are divided into three bands: values under R250 000; between R250 000 and R500 000; and above R500 000. Generally, properties at or below R500 000 are considered affordable because the estimated monthly housing cost (R15 000 to R16 000) is considered the maximum income eligible for many Government subsidy programmes, above which potential buyers must access the unsubsidised housing market.

15.15 Market Share

Market share is the percentage of a market accounted for by a specific entity in that market. Lending market share is determined by the number of all loans in an area or bond portfolio, originated, or held by a single institution, divided by the total number of bonds in the area or portfolio. Market share can reflect the business model or the prevailing attitudes of particular lenders towards opportunity within certain areas. Lenders track their market share by area and value carefully: too high could mean that they are at greater risk if values decrease, while too low means that the lender may be losing business to competitors.

15.16 Rental Index

A score calculated for each suburb, to measure the potential suitability of local areas for rental housing, as measured by a basket of six indicators, which are more favourable towards rental housing. A higher score, between 1 and 10, implies a greater likelihood of success. These indicators include density; the number of households currently renting; area median income; the affordability ratio; households to properties ratio and market growth as measured by the Housing Performance Index. The index gives higher weight to aspects more suitable to rental housing, such as density and income, and moderate weight to the current number of households renting (as reported to the census), the local income as a percentage of the municipal median income, affordability (the relationship between local incomes and sales prices), and the number of households in the area to formal housing units on the deeds registry.

15.17 Suburb

A neighbourhood (within or beyond the central metropolitan area), with an identifiable name, often socially accepted borders and common characteristics. This report uses suburb boundaries as established and demarcated by StatsSA (and referred to in its documentation as sub-places). In 2011, there were about 22,000 sub-places within South Africa.

15.18 Value or Worth

The value of a property as determined by several factors, including recent comparable sales nearby; CHURN; lending activity in the area; specific and area property details, such as the size, age, and amenities. A property’s worth is often related to the amount of information available to make an appropriate determination, which is a contributing factor in undervaluing affordable areas where details on formal market activity is inconsistent. This study uses Lightstone’s (www.lightstone.co.za) proprietary valuation methodology to determine value.


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16. Source List

• ARM Coal. (2006). Xstrata Coal South Africa and ARM Coal Site Visit. [PowerPointslides] November 2006, Xstrata Coal. [O]. Available at:http://www.arm.co.za/im/files/presentations/2006/xstrata_armcoal_visit-06nov06.pdf

Accessed 05 February 2015

• Africa Mining IQ. [sa]. Coal Mining in South Africa. [O]. Available. http://www.projectsiq.co.za/coal-mining-in-south-africa.htm.


• Exxaro. [sa]. Our People. [O]. Available.

http://www.exxaro.com/index.php/sustainability/people-development/#20


• Anglo American. 2011. The A Magazine: Partnership for Success. [O]. Available.

http://southafrica.angloamerican.com/media/~/media/1AE5E719F7AB44B790756A552900D6B6.pdf


• eMalahleni Local Municipality. eMalahleni Local Municipality 2014/2015 Draft IDP. eMalahleni.

The Housing Development Agency (HDA)6 - 10 Riviera RoadRiviera Office Park, Block AKillarneyJohannesburg, 2193

PO Box 3209Houghton, South Africa, 2041

Phone: +27 11 544 1000Fax: +27 11 544 1006/7Website: www.thehda.co.za

Department of Human Settlement240 Justice Mahomed StreetGovan Mbeki HouseSunnyside, Pretoria0002

Private Bag X645 (Minister)PretoriaSouth Africa, 0001

Phone: +27 12 421 1311Website: www.dhs.gov.za

Documents

Working for integrationthehda.co.za/pdf/uploads/multimedia/eMalahleni___Mpumalanga.pdf · 1. Frequently Used Acronyms 1 2. Introduction 2 3. Context 5 4. Context: Mining Sector Overview